WE HELP JESS HARNESS THE SUN’S ENERGY TO POWER HER HOME ENERGY MADE FRESH DAILY

SUSTAINABILITY REPORT 2015 CONTENTS

02 ...... MANAGING DIRECTOR’S MESSAGE

04...... OUR COMPASS

05...... WHERE WE OPERATE

06...... OUR YEAR AT A GLANCE

08...... BUSINESS STRATEGY

09...... OUR PERFORMANCE

10 ...... GLOBAL TRENDS

12 ...... APPROACH TO MATERIALITY

14 ...... ENGAGING WITH OUR STAKEHOLDERS

17...... ENERGY DEVELOPMENTS

32 ...... DELIVERING ENERGY

40...... MANAGING OUR BUSINESS

60...... FUTURE ENERGY SOLUTIONS

64...... PHILANTHROPY

67...... RATINGS AND BENCHMARKS

68 ...... GLOSSARY

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IMPORTANT INFORMATION Origin has been reporting its sustainability The following Report includes an assessment performance since 2002 via an annual of upstream activities by Australia Pacific LNG, Sustainability Report. in which Origin has a 37.5 per cent shareholding Unless otherwise stated, Origin’s Sustainability (consistent with its holding as at 30 June 2014) Report provides a summary of activities, operated and is the Upstream operator. assets and non-financial performance between This Report does not contain information 1 July 2014 and 30 June 2015. Emissions on the sustainability performance of Contact performance is reported on an operated and Energy, in which Origin held a 53.1 per cent equity basis. Significant events occurring after interest at the close of the reporting period. the close of the period may also be referenced. After the close of the period, Origin divested Origin’s Sustainability Report outlines the its entire interest in Contact Energy. Information Company’s performance against a number regarding Contact Energy can be found of Material Aspects. Origin’s approach to at www.contactenergy.co.nz. determining Material Aspects is informed All monetary amounts are in Australian dollars by the Global Reporting Initiative and the unless otherwise stated. AA1000 Accountability Principles. WE HELP MAKE PEACE AND QUIET We’re providing energy to millions of homes so kids around the country can enjoy their favourite stories.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 01 MANAGING DIRECTOR’S MESSAGE

In seeking to meet this objective, environmental It has long been the case that access to a reliable and economic goals can often be competing and affordable supply of energy has been central but are not necessarily mutually exclusive – they require a balance between them to be met. to the economic development of nations and to At Origin we are always seeking to find this balance, particularly in the opinion of our key the improvement in the standard of living that stakeholders – our shareholders, customers, people naturally seek. employees and the communities we serve. We listen to and consider the opinions of our In more recent times, it has also become the key stakeholders and they inform the choices we create and the decisions we make. objective of our industry that the contribution energy makes to improving living standards BALANCING ENVIRONMENTAL AND ECONOMIC OUTCOMES be achieved in an environmentally as well as As a diversified energy company active in both domestic and export markets, we see that the economically sustainable basis. global energy landscape is subject to continual change. We regularly evaluate how these global trends create opportunities and risks in our business and respond to them appropriately. As world population grows, energy demand grows with it. We know that the carbon emissions associated with traditional forms of energy production have to be significantly curtailed. For this to occur there must be a significant transition in the way energy is produced and used and this necessary transition creates the long term risks for investors in the energy sector. The International Energy Agency (IEA) has been charged by governments around the world to analyse and interpret data relevant to energy and climate change in order to provide guidance on how climate change can be addressed.

02 MANAGING DIRECTOR’S MESSAGE The IEA’s guidance is framed by global warming Notwithstanding this experience, Origin has This year our results are as follows: scenarios – two of which are the New Policies supported the reframing of the Renewable —— Total Recordable Injury Frequency Rate Scenario and 450 Scenario – and provides Energy Target and also supports the Australian (TRIFR) for safety: performance improved direction on the appropriate energy mix in Government’s announcement of a post to 3.8 compared with 5.0 in the prior year; order to minimise the impacts of climate change. 2020 emissions reduction target of a 26 to —— Total Shareholder Returns for financial In both scenarios, the world must place limits 28 per cent reduction on 2005 levels by 2030 performance: -15 per cent for the year on the use of high-emission fuels such as coal, as a target that is balanced in its aspiration and when compared with +125 per cent increase in appropriate quantities the use its feasibility. Origin looks forward to a successful during the past decade; of natural gas, and grow the contribution global outcome at the COP21 meeting in Paris —— Net Promoter Score: a 9 point of renewable energy. in December 2015, and the subsequent policy improvement on the prior year The IEA estimates that an investment of detail that brings clarity and certainty to the to -39, from -48; $2 trillion a year(1) is required through to 2040 energy policy landscape in the years ahead. —— Engagement for our people: up 5 points to provide sufficient energy to meet the world’s Each year, Origin publicly reports the absolute to 52, from 47 last year; and growing energy needs on an environmentally emissions and emissions intensity of our power —— RepTrak™ for community reputation: and economically sustainable basis. generation and natural gas production activities. at 61.8 which is steady with the prior Throughout the world the transition in the This year’s results reconfirm that Origin’s power year, and the year average up on the way we produce and use energy required to generation activities compare favourably to prior year average. balance environmental and economic outcomes many of our peers and align with both Australia’s With the recent fall in oil prices and the creates significant risks for businesses like and global climate change objectives. prospect that this situation may persist longer Origin. Our industry has invested significantly Given Origin’s integrated business – one that than might have previously been anticipated, in long life, capital intensive, energy producing sees us developing, generating and selling energy our shareholder returns over the year in assets to meet our customers’ requirements – we undertake a diverse range of activities in review have been significantly reduced. for an affordable and reliable supply of energy, the communities in which we operate. We give We have lost some of the balance we seek yet some of these assets are more carbon careful consideration to our environmental to preserve and have taken action to build intensive than many believe is appropriate to footprint across this range of activities, and resilience within Origin to operate in a lower operate in a more carbon constrained future. provide transparency through this report oil price environment and restore balanced Origin has always managed this risk by investing on the environmental impact of our activities. outcomes for our key stakeholders. in less carbon intensive forms of energy such We believe that our performance against as natural gas and renewables, and assets that BALANCING OUR COMMITMENTS these measures helps us understand whether are more carbon efficient than industry average TO STAKEHOLDERS we are getting the balance right in respect – such as the Eraring coal-fired power station. of the commitments we have made to our We also seek to find a balance in our business Recognising the inevitable move to more key stakeholders. in meeting the expectations of our key renewable generation, Origin has remained stakeholders – our customers, shareholders, This is our 14th annual Sustainability Report and underinvested in generation relative to the employees and the communities we serve. details our performance in the Material Aspects energy we sell to our millions of customers. of our business. We believe it demonstrates We recognise these expectations through the This reduces the risk that Origin will have a year of good operational performance across commitments we make in our Compass and stranded generation assets and gives Origin our business and continued progress on building know that fulfilling these commitments can the opportunity to invest in less carbon a strong and sustainable company that finds the often require difficult choices and decisions intensive assets such as renewables when right balance in meeting the expectations to be made if we are to achieve a balanced it is economic to do so. of our key stakeholders. outcome, which will be sustainable over the Governments have a critical role to play in longer term. facilitating a balanced transition to a less carbon intensive economy. They not only set the policy Our principles and values provide the guidance framework in which the industry operates but we need to make these choices and decisions. also often set targets for specific outcomes We set targets and measure performance such as renewable energy targets, efficiency to evidence our progress in delivering targets and carbon pricing schemes. on our commitments. Grant King Properly designed policies, regulations and To measure our progress we use: Managing Director targets can play a critical role in accelerating —— Safety and Engagement for our people; the required transition, and conversely, poorly —— Total Shareholder Returns for designed policies can have a very damaging shareholders; effect on the industry. —— Net Promoter Score for customers; and There is much in the global experience of —— Reputation for the communities we serve. government intervention that has weakened We have high aspirations for our performance the industry’s ability to fund required ongoing on each of these measures and set targets each investment in energy production. Poor policies, year to continually improve. poorly implemented, have had a damaging effect. In Australia in the two decades since the nation committed to reducing carbon emissions by 5 per cent on 2000 levels by 2020, there has been a multiplicity of initiatives at state and federal level that have significantly increased risks for investors in the industry.

(1) International Energy Agency, Energy and Climate Change, World Energy Outlook Special Report 2015.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING DIRECTOR’S MESSAGE 03 OUR OUR PURPOSE COMPASS We aspire always to lead. We deliver today’s energy needs, and we search and innovate to create tomorrow’s energy solutions. We honour our principles and values, and they are evident in all we do. We live our commitments to our shareholders, to our customers, to our people, to our communities and to our business partners.

OUR PRINCIPLES OUR VALUES OUR COMMITMENTS

Origin’s Principles provide guidance for making Origin’s Values describe good behaviour: Origin’s Commitments define the outcomes the right decisions: Caring: We care about our impact on we strive to achieve for key stakeholders. —— We conduct ourselves and our business customers, colleagues, the community, We commit to: with due care and in accordance with environment and shareholders. —— Deliver market-leading performance relevant laws and regulations. We have Listening: We listen to the needs of others, for shareholders by identifying, an overriding duty to ensure the health knowing that an unfulfilled need creates developing, operating and growing and safety of our employees, and the best opportunities. value-creating businesses. to minimise the health, safety and environmental impacts on our customers Learning: We constantly learn and implement —— Create value for our customers and the communities in which we operate. new and better ways, sharing information by understanding their needs and and ideas effectively. delivering relevant and competitive —— We will add value to the resources that energy solutions to meet those needs come under our control. Delivering: We deliver on the commitments made in all areas of performance. both today and into the future. —— The value we create will be distributed —— Create a rewarding workplace for to stakeholders, recognising the need our people by valuing everyone’s to ensure the sustainability of our contribution, encouraging personal business, and its impact on the development, recognising good environment and the communities performance and fostering equality in which we operate. of opportunity. —— We encourage diversity and expression —— Respect the rights and interests of of ideas and opinions but require the communities in which we operate, alignment with the Company’s Principles, by listening to them, understanding Values and Commitments and the policies and managing the environmental, established to implement them. economic and social impacts of —— When faced with choices, we make our activities. decisions knowing they will be subject —— Respect the rights and interests to scrutiny. We should be able to of our business partners by working demonstrate the soundness of our collaboratively to create valued and decisions to all stakeholders. rewarding partnerships.

04 OUR COMPASS WHERE WE OPERATE

Exploration acreage Conventional & unconventional Geothermal

Generation Power station (gas fired) Power station (coal fired) Vietnam Wind generation Ho Chi Minh City Hydro generation Chile Solar generation Santiago Production facility Indonesia Development proposal

Office LPG seaboard terminal LPG terminal or branch

Port Moresby

Rarotonga

Tafuna

Port-Vila Suva

Roma Brisbane

Perth Sydney Adelaide New Plymouth Melbourne

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ORIGIN ENERGY SUSTAINABILITY REPORT 2015 WHERE WE OPERATE 05 OUR YEAR AT A GLANCE 2015 FINANCIAL YEAR

2014 3 October 9 December Origin held a forum at Sydney’s Powerhouse Speculant-1 exploration well discovered Museum for its LittleBigIdea schools competition, commercial quantities of gas in the Otway 4 July with the three most innovative ideas announced Basin, offshore Victoria. This well forms part Construction of the Australia Pacific LNG from more than 1,300 entries. of the Halladale and Speculant project which main gas transmission pipeline completed. will enable increased utilisation of the onshore Otway facilities. 12 November 17 July Launch of the Deloitte Access Economics Passed through lower electricity costs Report Emissions metrics – Australia’s carbon 16 December to customers following the repeal of the footprint in the G20. Commissioned by Milestone achieved at BassGas Mid Life Australian Government’s carbon price. Origin, the report proposes better ways to Enhancement Project – successful lift understand the economic drivers of carbon of the export compression and condensate emissions and better reflect the relationship pumping modules into place on the Yolla 12 August between emissions and economic activity. offshore platform. Completed the acquisition of Karoon Gas’s 40 per cent interest in two offshore exploration permits in Western Australia’s 25 November 2015 Browse Basin. Origin increased its investment in Energía Andina SA to 49.9 per cent. Energía Andina acquired 40 per cent of the 69 MW Javiera 10 February 9 September solar project in Chile’s Atacama Desert which The Federal Court of Australia ordered Announced the successful pricing and began commercial operations in the second Origin and two of its subsidiaries to pay allocation of €1 billion hybrid capital half of the 2015 financial year. penalties totalling $325,000 and notify securities, completing the Company’s affected customers for contravening the financing for the acquisition of interests Australian Consumer Law by making false in two exploration permits located in 5 December or misleading representations to residential Western Australia’s Browse Basin. Origin became the major partner of the consumers in South Australia regarding NSW State Emergency Services (SES) Cadet the DailySaver energy plan, in proceedings and Leadership Program which provides brought by the Australian Competition 23 September secondary school students with the leadership and Consumer Commission (ACCC). Launched the Greater Energy Choice and life skills required to make a difference campaign in the ACT, with Origin in the community. commencing sales of electricity and gas to homes and small businesses in the capital territory for the first time.

06 OUR YEAR AT A GLANCE WE HELP TOM AND RYAN PERFORM THEIR LATEST TRACK We’re providing energy to power the creativity of budding musicians.

11 February 21 April 26 June First gas from Australia Pacific LNG’s coal Released Origin’s first Reconciliation Action Royal assent for new legislation on the seam gas fields in the Surat Basin reach Plan (RAP), which details our efforts and large-scale Renewable Energy Target (RET) Curtis Island, Queensland. commitment to respect the rights and of 33 terawatt hours (TWh). This provides interests of the Aboriginal and Torres Strait a boost for the renewables industry, which Islander communities. will need to build a substantial amount 16 February of wind and solar by 2020. Origin awarded tender to build 3MW solar array at Tonsley in SA, which will be the largest 22 April rooftop array in Australia. Australia Pacific LNG reached a significant 26 June milestone with the successful start-up of the Origin awarded the tender to design, first of seven gas turbine power generators, build, own and operate 924 solar panels 19 February designed to provide electrical power to the on the roof of the Royal Australian Mint Origin reported interim results including Curtis Island LNG facility. in Canberra. The solar system will help the Statutory Loss of $25 million and Underlying Mint save money on electricity and reduce Profit of $346 million. its carbon footprint. 3 May Launched Don’t Waste Your Roof solar campaign 15 March which encourages Australians to think differently 1 July Origin broke the record for construction about the value of their roof and the potential Secured a 12-year $100 million of the longest extended reach drilling section of solar energy. finance commitment from the Clean in Australia as part of the drilling campaign Energy Finance Corporation to further for the Halladale and Speculant development develop rooftop solar offerings for project in the Otway Basin. 10 June Australian homes and businesses. Origin announced its intention to be number one in solar by ‘installed capacity’. This follows 27 March the launch of its Solar as a Service product 28 July 2015 The Federal Court of Australia ordered in May, which enables more customers to Loading of refrigerants commenced Origin to pay $2 million in penalties and access the benefits of solar without having at the Curtis Island LNG facility, one of its third-party service providers to pay to purchase the system. marking a significant achievement $325,000 in relation to unlawful door-to-door in the commissioning and start-up selling practices in proceedings brought by phase of Australia Pacific LNG. the ACCC. Origin ceased door-to-door sales 16 June in September 2013. Origin announced a new community partnership to raise funds for the NSW SES donating $5 to the organisation for every LPG cylinder or refill purchased by a new customer until 30 September 2015.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 OUR YEAR AT A GLANCE 07 BUSINESS Origin supplies energy to markets in Australia, STRATEGY New Zealand and the Asia Pacific region. Origin’s strategy of connecting resources to markets is pursued through a clear focus on its three businesses and four priorities, designed to drive continued improvement in Origin’s performance.

3 BUSINESSES

REGIONAL LEADER REGIONALLY SIGNIFICANT GROWING POSITION IN ENERGY MARKETS POSITION IN NATURAL GAS IN RENEWABLE ENERGY AND LNG PRODUCTION IN THE ASIA PACIFIC REGION

4 PRIORITIES

IMPROVING RETURNS DELIVERING GROWTH GROWING CAPABILITIES CAPITAL MANAGEMENT IN ENERGY MARKETS IN THE INTEGRATED AND INCREASING AND FUNDING GAS BUSINESS INVESTMENT IN RENEWABLES

08 BUSINESS STRATEGY We use five key measures to tell us how OUR we are tracking against our commitments PERFORMANCE to our key stakeholders. These measures touch on a range of social, environmental and economic aspects of activities carried out by Origin.

5 MEASURES

TRIFR FOR TOTAL SHAREHOLDER NET PROMOTER SCORE OUR SAFETY RETURNS FOR FINANCIAL FOR OUR CUSTOMERS’ PERFORMANCE ADVOCACY

Total Recordable Injury Frequency Rate: Total Shareholder Returns: Strategic NPS: 3.8 Our lowest ever and a -15% For FY2015 -39 At 30 June 2015 24% improvement while over the past decade 9 point improvement on the prior year Total Shareholder Returns on the prior year were 125%

ENGAGEMENT SURVEY REPTRAK™ FOR FOR PEOPLE AT ORIGIN COMMUNITY REPUTATION

Employee Engagement Score: Community Reputation Score:

52 61.8 At 30 June 2015 Improvement from 47 Steady with the prior year in the prior year

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 OUR PERFORMANCE 09 GLOBAL The global energy landscape is characterised TRENDS by constant change – from climate change, to technology developments and dramatic fluctuations in the price of oil. The following trends provide insight into how the global energy landscape may continue to evolve, which we constantly evaluate to understand both the opportunities and potential risks facing Origin.

INCREASING POPULATION THE ASIAN ENVIRONMENTAL CONCERNS AND URBANISATION CENTURY AND CLIMATE CHANGE

Today’s world population of approximately In 2014, China surpassed the United States Energy production accounts for two thirds 7.3 billion is expected to reach 9.7 billion by to become the largest economy in purchasing of the world’s greenhouse gas emissions(2) 2050(1). Despite more than half of the world’s power parity terms(4). Asia has been an engine and there is increasing pressure from population living in cities, about 1.3 billion of growth for the world economy and over the public to reduce emissions in order to people today still have no access to electricity the past few decades China’s growth has led mitigate climate change. Finding the right and 2.7 billion rely on traditional energy to the provision of electricity for around half balance between our energy use and meeting sources such as biomass for cooking(2). a billion people(2). While the rate of China’s our environmental objective to limit global The IEA expects the world’s use of electricity expansion is moderating, the economic warming to 2 degrees Celsius is a significant to double between now and 2050(3), requiring prominence of the Asian region is expected societal challenge. investment of around $2 trillion each and to continue well into the century. In the lead up to the United Nations every year between now and 2040(2). As the Asia’s growing economies continue to demand Framework Convention on Climate Change world’s population continues to grow and energy, as well as new and cleaner energy meeting in Paris later this year, a number urbanise, ensuring people have access to sources such as natural gas and renewables, of countries have made long-term emission a reliable, affordable energy supply is one to combat air pollution and climate change. reduction pledges. Importantly, this includes of society’s significant challenges. With global energy demand set to grow, announcements from the ‘big three’ Asia is expected to account for 60 per cent emitters – China, the US and Europe – of this growth(5). Australia’s proximity to Asia, which collectively account for about half as well as its large LNG export market, means the world’s emissions. Australia, which it is best placed to help meet this increasing represents 1.3 per cent(6) of the world’s energy demand. emissions, has announced an emissions reduction target of 26 to 28 per cent on 2005 levels by 2030. Against this backdrop, the ongoing challenge for energy providers is to ensure that energy supply meets the three key criteria of being reliable, affordable and also being produced in an environmentally sustainable way.

10 GLOBAL TRENDS SOON WE WILL HELP LIGHT UP BEIJING We are providing cleaner energy to buzzing metropolises across Asia.

CREATING A GAS AND GROWING COMPLEXITY AND RENEWABLE FUTURE ENERGY DEMAND CHALLENGE IN MAKING THROUGH INNOVATION GOVERNMENT POLICY

Renewables accounted for nearly half The lower carbon profile of gas and The global energy sector is highly regulated, of all new power generation capacity its abundant supply underpin its status and as nations put the need to address climate globally in 2014 and continue to be as the world’s fastest growing fossil fuel. change at the forefront of energy policy the dominated by wind, solar and hydro. As countries seek to diversify their energy level of complexity in formulating commercially While renewable energy is part of the mix and decarbonise their power supply, viable policy settings increases. world’s energy mix to deliver clean forms gas is expected to play an increasing role The European Union has an overarching of energy and address climate change, in displacing coal. The significant fall in oil target of a 40 per cent reduction in emissions it also provides energy access to people prices and the realignment of oil-linked gas on 1990 levels by 2030, and while the subsidies living in developing countries. pricing is also expected to enhance the for renewables have been reduced, the target Continued innovation in battery storage attractiveness of gas in the short term. for 2030 remains strong. While attempts technology will enable the integration Between 2014 and 2020, the IEA expects to create an emissions trading scheme in the of increasing sources of renewable power global gas demand to increase at an average US have been shelved, the Environmental into the energy mix. While energy storage annual rate of 2 per cent(7). The demand for Protection Agency is now using regulation solutions are currently expensive, ongoing gas in China, non-OECD Asia and Africa to to reduce emissions. Most states also have research and development – as well as 2020 is forecast to increase at compound renewable energy targets and California regulatory frameworks – are expected average aggregate growth rates of 10, has its own emissions trading scheme. (7) to drive the cost of storage down. 2.9 and 3.0 per cent respectively . In Australia, a variety of incentives have been In Australia, the LNG market is expected introduced, changed or removed in order to triple between now and 2017 with the to reduce emissions and promote renewable completion of a number of projects and energy, including solar feed-in tariffs, ramp up of exports from the east coast, a carbon pricing mechanism, direct action, making Australia the world’s largest producer and various renewable energy targets. (8) of LNG by 2018 . Increasing LNG trade also In many developed countries the helps countries to maintain security of gas implementation of policies to mitigate supply by mitigating geopolitical risk. climate change must be considered in the context of subdued energy demand. Therefore, as policy measures determine the pathway to decarbonising economies, the ongoing challenge is to ensure that energy is delivered in a reliable and affordable way.

(1) United Nations, World Population Prospects: 2015 revision. (2) International Energy Agency, Energy and Climate Change: World Energy Outlook Special Report 2015. (3) Calculated using data from International Energy Agency, World Energy Investment Outlook 2014. (4) PricewaterhouseCoopers, The World in 2050: Will the shift in global economic power continue? February 2015. (5) International Energy Agency, World Energy Outlook 2014. (6) dfat.gov.au/international-relations/themes/ climate-change/Pages/global-emissions-data-graph.aspx (7) International Energy Agency, Medium-Term Gas Market Report 2015. (8) RBA Bulletin, Australia and the Global LNG Market: March Quarter 2015.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 GLOBAL TRENDS 11 APPROACH TO Origin’s approach to sustainability is anchored MATERIALITY in Our Compass. Our purpose, the decisions we make, the actions we take and the behaviours we display as an organisation are guided by Our Compass. In order to be a sustainable business, we believe we must demonstrate how we are meeting the needs and expectations of those who are most interested in our business – our employees, investors, customers and the communities in which we operate.

DEFINING WHAT IS MATERIAL Our reporting provides detail on our Duty TO OUR PERFORMANCE of Care for each of the Material Aspects. Origin’s sustainability reporting reviews When our Duty of Care is fulfilled, we then Where possible, the Company’s performance against a number strive to create value in how we manage our we seek to create of Material Aspects. Material Aspects are Material Aspects, from improved delivery and those activities that are of most importance efficiencies, to better, innovative and value- more valuable social, to both our business and stakeholders. enhancing outcomes. Where possible, we seek environmental and We believe if we manage these Material to create more valuable, social, environmental Aspects well, we can be confident of a more and economic outcomes for society, such economic outcomes successful and sustainable business. as improved social amenity and wellbeing, for society. Material Aspects are informed by a deep improved state of the natural environment understanding of our business and stakeholders’ and improved standards of living to the benefit interests. We use the Global Reporting Initiative of our customers, investors, employees, and (GRI) and the AA1000 Accountability Principles the communities in which we operate. to inform the reporting of our Material Aspects. In addition to these Material Aspects, we also This year Origin completed a materiality review, report on other topics that are of interest which included examining each Material Aspect to our stakeholders. according to its level of risk to the Company, We continue to listen to our stakeholders the level of stakeholder interest and how to help determine whether our management topical each activity is. In order to be included of Material Aspects and topics of interest in Origin’s Sustainability Report, Material are appropriate and, from this interaction, Aspects must meet the threshold in two we learn where we can improve. or more of these three areas. Changes to the Material Aspects against Material Aspects and key topics which we report this year include the merging of ‘Setting sustainable tariffs’ with ‘Energy Energy developments affordability’, and the inclusion of ‘Emissions’ —— Land access and coexistence in our new ‘Climate Change and our business’ —— Water management section. We also added ‘Employee engagement’ —— Impact on communities and ‘Process safety’, which forms part of the —— Sharing economic benefits ‘Safety’ Material Aspect. —— Biodiversity

HOW WE REPORT Delivering energy The first principle which guides the —— Customer care management of our business is our Duty —— Energy affordability of Care. This requires us to, at a minimum, Managing our business comply with the relevant laws, regulations —— Safety and contractual obligations imposed on us —— Climate change and our business by others. Where practical and desirable, —— Sound and stable policy we choose to impose on ourselves additional —— Financial performance standards to create better outcomes for —— Corporate governance our business and our stakeholders. This —— Diversity and inclusion may be because these additional standards —— Employee engagement help us manage risk better, or because our engagement with our stakeholders shows Future energy solutions DISCOVER us how, by imposing additional standards, —— Developing cleaner energy solutions MORE we can better manage our environmental, —— Renewable energy opportunities ONLINE social and governance performance and meet expectations more fully. Philanthropy —— Origin Foundation

12 APPROACH TO MATERIALITY WE HELP ELLEN KEEP IN TOUCH We’re providing power so Ellen can stay connected with her loved ones and the world.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 13 ENGAGING Our business brings us into contact WITH OUR with a diverse range of stakeholders. STAKEHOLDERS How we approach and build stakeholder relationships over time is important to our business.

Stakeholder Key areas of interest How Origin engages

OUR CUSTOMERS Origin has approximately Energy underpins our everyday Our Customer Charter guides our engagement with customers. 4.3 million electricity, gas life. Our customers have come to Customers provide us with feedback via letters and emails, contact and LPG customer accounts expect a reliable source of energy, with our call centre, as well as through social media. Customer Service across Australia. provided at an affordable price and Hubs also provide customers with a physical location they can visit produced in an environmentally to address their concerns and provide feedback. Our commitment responsible way. We seek to provide We also engage with consumer protection regulators and Ombudsmen Create value for our customers our customers with a wide choice to help identify systemic problems, and opportunities to better meet the by understanding their needs and of products and services, as well as needs of customers. delivering relevant and competitive more visibility on their energy use energy products and solutions and costs. Our key activities in the We undertake qualitative and quantitative market research to better to meet those needs both today 2015 financial year are described understand customer needs, priorities and perceptions. During the period, and into the future. in Customer care and Addressing Origin captured feedback through its Net Promoter Score (NPS) which energy affordability on pages confirmed that the quality of our service and energy affordability were 32 and 36. of most importance to our customers.

OUR COMMUNITIES Our activities bring us into We communicate directly with Local communities – Ongoing dialogue is underpinned by our contact with a wide range of communities and traditional owners Community Directive. We engage with communities through meetings, communities in Australia and of the land around our operations and communicate through targeted newsletters, public information internationally. Origin engages and developments. centres in key project areas, project-specific websites and hotlines. with local community groups We also work with intermediaries In some locations we have Community Relations Advisors who convene and individuals as well as and influencers who reflect and or participate in formal community reference groups. community representatives represent the interests of the We undertake scientific research in partnerships with organisations such as governments broader community. These include: including the CSIRO, into the social and environmental impacts associated and non-government with the Coal Seam Gas (CSG) industry, which helps local communities organisations (e.g. charities Governments and regulators who are charged with representing respond to resource developments. and environmental agencies). community interests. Origin also measures stakeholder perceptions through the Our commitment Industry associations which implementation of an independent benchmark using RepTrak™ Respect the rights and interests represent the interests of the methodology. The RepTrak™ results were incorporated into of the communities in which we energy and business sectors. communications strategies throughout the year. operate by listening, understanding who express views Governments – Origin’s Managing Director, senior executives and working together to manage Media of the community. and members of the Corporate Affairs team have regular dialogue the environmental, economic and and meetings with representatives from both state and federal social impacts of our activities. Non-government organisations governments, the Opposition and other political parties. (NGOs) which represent diverse interests including environmental, Media – A dedicated team manages engagement with Australian social and human rights. and international media through media releases, events, one-on-one interviews, background briefings and presentations. The team also Water management, as well monitors and measures media engagement and coverage, which as land access are key areas influences communications strategy and ensures stakeholders of concern for the communities are receiving informed and balanced content. in which we operate. How we manage water resources and NGOs – Key Origin executives engage with major environmental Land access and coexistence and climate change-focused organisations to exchange views and are described in the Material information in association with our projects and major activities. Aspects on pages 20 and 17 Industry associations – We are an active member of a number of this report. of relevant industry and business associations including the Australian Our media analysis suggests Petroleum Production and Exploration Association (APPEA), Business a continuing high level of interest Council of Australia, Energy Retailers Association of Australia, in public policy as it relates Energy Supply Association of Australia, and the Queensland to energy and emissions, and Resources Council. also the development of the gas industry. Key activities relating to our public policy and advocacy work is outlined on page 49.

14 ENGAGING WITH OUR STAKEHOLDERS To understand the potential impact and opportunities our activities create, we actively listen to stakeholder feedback. What we learn through direct engagement is supplemented by structured stakeholder assessments and research, which helps us to define the activities that are of most importance to both our business and stakeholders. This is a key input to determining our Material Aspects. Our ongoing challenge is to find the right balance in meeting the needs and expectations of our various stakeholders. Our commitment to and engagement with each of these stakeholders is detailed below.

Stakeholder Key areas of interest How Origin engages

OUR EMPLOYEES Origin directly employs Employees and contractors place Face-to-face communication with our employees includes toolbox approximately 6,900 people a high value on health and safety, talks and visits from senior leaders. A twice yearly formal performance plus several thousand contractors, and the promotion of behaviour management process for all employees ensures roles are clear, the majority of which are based that aligns with Our Compass skills are developed and opportunities provided. in Australia. and Code of Conduct. We also talk to employees and hear feedback via twice yearly Our commitment Employees require an inclusive employee roadshows with the Managing Director or other members workplace, fair and equitable of the Executive Management Team; employee roadshows at the Business Create a rewarding workplace remuneration, recognition of good Unit level; as well as senior leadership and Business Unit team meetings for our people by valuing everyone’s performance, career development and conferences; a company-wide intranet; and operation-specific contribution, encouraging personal and training to encourage personal newsletters, and announcements. development, recognising good development. performance and fostering equality We conduct engagement surveys to understand the views of opportunity. Unions are represented at some of our employees. Engagement is one of five measures monitored of our operations and are focused to drive continued improvement in Origin’s performance. on workers’ rights and wages, collective bargaining, health and safety and working hours and rosters. Employee engagement is outlined on page 58 of this report.

OUR INVESTORS Our investment community The investment community We engage with investors through a number of channels. Material price incorporates retail shareholders, measures how Origin is delivering sensitive information is distributed via the ASX. Shareholders also have institutional investors, debt shareholder value. an opportunity to engage with the Company at our Annual General providers, credit reporting Investors are interested in Meeting held each year after the release of full year results. agencies and analysts including the financial and non-financial The Company has a dedicated investor relations team to facilitate Environment, Social and performance of the Company two-way communication with institutional investors and analysts. Governance (ESG) advisers and how we identify, manage We conduct analyst and investor briefings, domestic and international all of whom rely on material and mitigate risks across the investor roadshows, respond to shareholder enquiries and give industry information to make informed business to deliver sustainable presentations. Corporate Affairs also directly participates in shareholder decisions on Origin’s current shareholder value. engagement, via reporting documents including the Annual Report and and future performance. Non-financial metrics include Sustainability Report. Our commitment environmental, social, governance Origin’s website provides a list of key dates and all recent ASX Deliver market-leading performance and climate change/carbon announcements, as well as presentations and Company financial for shareholders by identifying, management. and non-financial reports. developing, operating and growing It is therefore important for In addition, Origin participates in investor-focused external benchmarking value-creating businesses. our investors to be reassured including the Dow Jones Sustainability Index, FTSE4Good Index and that decisions are reached through CDP Climate Change as well as responding to queries and surveys sound leadership and governance. issued by ESG analysts. Origin’s financial performance, together with corporate governance, is outlined on pages 51 and 53.

OUR BUSINESS PARTNERS Origin has a number of Business partners require an open Regular communication throughout daily operations, with additional joint venture and investment and transparent relationship with engagement undertaken through formal meetings; representation partners, both domestically and Origin to assist joint ventures on joint venture boards; and participation in operating committees. internationally. This stakeholder in delivering shareholder value. Origin’s Code of Conduct and Supplier Selection and Engagement group also includes businesses Directive provide guidance on fair and ethical dealings with suppliers. which provide goods and services for our projects and operations. Our commitment Respect the rights and interests of our business partners by working collaboratively to create valued and rewarding partnerships.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENGAGING WITH OUR STAKEHOLDERS 15 WE HELP BENJI AND SAM STAY COMFY We’re providing gas to keep millions of families warm and cosy through winter.

16 As the leading Australian integrated energy ENERGY company, we are constantly working to deliver DEVELOPMENTS today’s energy needs and searching and innovating to create tomorrow’s energy solutions.

Origin’s development of natural resources We are required to comply with a range of laws, such as gas and renewables to meet the regulations, standards, codes of practice and energy needs of society, typically require large guidelines when we access land for Australia LAND ACCESS scale, capital intensive projects. This brings Pacific LNG. AND COEXISTENCE us into contact with a variety of stakeholders, Our formal process for managing access to AT A GLANCE some of whom may be impacted by our and disturbance of land is Origin’s Disturbance development and others who may be able Approvals Process. This process not only defines OUR PURPOSE to share in the benefits. how we will meet our obligations under various Establish strong landholder At the heart of our interactions with stakeholders laws, standards, codes of practice and guidelines relationships built on trust and are two of our company values – listening and – but also maintain respectful relationships with mutual respect to support project learning. In this section of the report we discuss landholders when accessing land. Prior to the delivery and operations. how we manage environmental, economic and commencement of any project, we typically social impacts and opportunities across our undertake consultation with landholders. Laws and regulations energy developments. Our disturbance approvals are guided by safety, environmental and cultural heritage state Our development activities legislation described in the Coordinator- at Australia Pacific LNG follow General Report, the Queensland Land Access the Queensland Government’s Code 2010, and federal legislation including Land Access Code plus many LAND ACCESS AND COEXISTENCE the Environment Protection and Biodiversity other regulations. Why it is important Conservation Act 1999 (Cth) and Native Title Act 1993. Our additional actions Natural resources such as gas often lie below the surface of the land. Where we do not own To help us build and maintain positive long- Origin, on behalf of Australia the land, we are required to negotiate access term working relationships with landholders, Pacific LNG, works with in order to develop those natural resources. we assign a Landholder Relations Adviser (LRA) landholders to develop specific Access to other people’s land may be required to all landholders. LRAs provide a single point Property Management Plans which to accommodate infrastructure associated of contact for the landholder for all land identify considerations unique with our energy developments such as power access related matters. to each landholder’s property. stations, pipelines, wells and gas processing facilities. Land access can involve a range How the Disturbance Our approach of landholders, who are often based in Approval Process works We follow a rigorous, formal remote or regional areas, including private process from pre-planning land owners, businesses, as well as local LRAs develop Property through to post-activity and state governments. Management Plans in Scoping consultation with landholders land rehabilitation. How we approach and build landholder to identify considerations relationships over time is important for unique to each property. Our performance our business. Our effective management of land access activities helps to maintain During the 2015 financial year, the ongoing confidence of both landholders Site visits are used to verify we signed 59 compensation and regulators throughout the life of our any constraints identified agreements and completed our projects and operations. Scouting during the scoping stage. land access activities for Phase 1 of the Australia Pacific LNG Currently, while Origin is required to access project. Origin also signed land to support many of its activities, the 10 compensation access greatest requirements relate to the Australia agreements for its Halladale Pacific LNG project, which is developing CSG We work with landholders to identify infrastructure locations and Speculant project. resources for LNG export. Australia Pacific Defining and the supporting activities LNG’s land access activity is the primary layout focus of this section. required for construction and operation. Managing land access and disturbance at Australia Pacific LNG The proposed layout of Origin seeks to apply a fair, transparent infrastructure is verified with and well-regulated process to our land access Approval the landholder, and compliance activities, aiming to provide our stakeholders with relevant policies, with confidence that we will conduct ourselves regulations and codes with due care and that they will be fairly of practice confirmed. compensated for changes caused by our developments.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENERGY DEVELOPMENTS 17 We typically write our agreements in plain During the period, no land access agreements English; outline how we are to access land during were concluded through alternative dispute development; how we conduct ourselves and resolution mechanisms or court resolution. our business; and how the landholder is to be At the end of the 2015 financial year, compensated. We give landholders sufficient time compensation agreements were in place to consider our plans, provide feedback and obtain for 977 wells to support Phase 1 of the legal advice and negotiate their agreements. Australia Pacific LNG development, completing Once these steps have been completed, the requirements to negotiate access to land for relationship is formalised through an agreement this part of the project . Each year, we will such as a Conduct and Compensation Agreement. require access to land for new gas wells and associated infrastructure to sustain gas Land access progress production over time. at Australia Pacific LNG The Australia Pacific LNG project is now In the 2015 financial year, Origin negotiated in the process of transitioning from and signed 59 compensation agreements with construction to operations. landholders. These compensation agreements secured access to 181 development well sites and 27 sites for exploration and appraisal activities, as well as six groundwater monitoring bores.

The Australia Pacific LNG project will play an important role in delivering a cleaner source of energy to help meet growing demand for natural gas in Asia.

DELIVERING AUSTRALIA PACIFIC LNG

Origin holds a 37.5 per cent Located in Queensland and having interest in Australia Pacific LNG, the largest 2P CSG reserves position in (1) which along with its partners Australia , the Australia Pacific LNG project ConocoPhillips (37.5 per cent) will play an important role in delivering a cleaner source of energy to help meet and Sinopec (25 per cent), growing demand for natural gas in Asia. is developing Australia’s largest The Australia Pacific LNG export project is CSG to LNG project, based a two train project with a nameplate capacity on nameplate capacity. of 9 million tonnes per annum of LNG. Australia Pacific LNG has committed LNG offtake agreements for approximately ABOVE 20 years with Sinopec for approximately Australia Pacific LNG project 7.6 million tonnes per annum and with Kansai is nearing completion. Electric for approximately 1 million tonnes per annum. Australia Pacific LNG continues to make good progress on the delivery of the CSG to LNG project and was 97 per cent complete on the Upstream and 92 per cent (1) Energy Quest May 2015. on the Downstream parts of the project as (2) Includes an unfavourable foreign at 30 June 2015. At the end of the reporting exchange translation impact of (2) A$362 million relative to project period, $25 billion had been spent. cost estimates announced in Sustained production of LNG from Train 1 February 2013, which were based on is expected to be achieved from the second 31 December 2012 exchange rates. (3) At 30 June 2015. For further quarter of the 2016 financial year and from information refer to Origin’s Annual Train 2 approximately six months later. Reserves Report for the year ended 30 June 2015, announced on At 30 June 2015, Australia Pacific LNG 31 July 2015. Also refer to the had 13,778 PJe of 2P CSG(3) reserves, which Important Information on reserves and resources disclosures on is more than sufficient to support domestic page 68 of this report. and LNG contracts.

18 ENERGY DEVELOPMENTS Additional land access activities Outside of Australia Pacific LNG, our most significant project requiring land access during the 2015 financial year was the Halladale and Speculant project in Victoria. This is an onshore drilling program to extract gas from offshore gas reservoirs and explore the Speculant prospect. Construction of a new 33-kilometre pipeline is expected to commence in late 2015 to transport the gas to the existing Otway Gas Plant for processing. While we have existing pipeline easements with landholders, we are required to negotiate new easements for the remaining section of the pipeline, and engage with landholders to access our current easement agreements. We must also negotiate Conduct and Compensation Agreements with landholders to ensure they are adequately compensated WORKING TOGETHER for disturbance and the impact on their TO MINIMISE OUR IMPACT business activities while we install the pipeline. During the period, 10 compensation agreements were concluded for the Halladale and Speculant project. All land access and Extensive planning and stakeholder With the well site situated 3 kilometres compensation agreements were concluded engagement helped us to minimise from the Great Ocean Road, and occupying through negotiation. the social and environmental impacts dairy farming country, we commissioned of our Halladale and Speculant a report by the Vet Group (a group of local Managing landholder complaints experienced veterinarians) to explore the Australia Pacific LNG drilling campaign in Victoria. effects of gas flaring on animal behaviours, Our LRAs, together with our Regional We are aware of the potential for our milk production, somatic cell count, and farm Community Relations staff, seek to manage assets and developments to impact on the management. The study examined six dairy complaints in accordance with our Complaints environment and communities. Ahead of the operations in close vicinity to the well site Management Plan. Halladale and Speculant drilling, we engaged and advised on strategies to minimise any potential negative impact on animal health In the 2015 financial year, we received extensively with local stakeholders and put and production in the weeks leading up 112 landholder complaints relating to strategies into place to reduce our impacts. to the flare event, as well as during and Australia Pacific LNG activities. Complaints The use of extended reach drilling to access post the event. The report found there were predominantly related to concerns about offshore reservoirs played a key role in was no observable or measurable effect workforce behaviour (e.g. failure to close private minimising our impact on the terrestrial on animal behaviour, farm management property gates and use nominated property and aquatic environments and ensured practices, milk production or somatic access routes), noise, dust, as well as traffic there was no direct interference with the cell count data during and after the and transport. We have undertaken a variety adjacent Bay of Islands Coastal Park. flaring events. of measures to address these complaints including dust suppression activities and noise mitigation plans. We have also strengthened our commitment to land access codes by insisting ABOVE Origin’s Halladale and Speculant project in Victoria. that contractors and staff demonstrate diligence in closing gates and observing property access routes.

Halladale and Speculant project Our Cultural Heritage Management Plans There were no complaints from landholders set out processes to manage and protect in association with the new pipeline during cultural heritage. These plans include the 2015 financial year. a communication protocol, management structure and survey process to ensure cultural Indigenous Land Use Agreements and heritage is protected. We have nine Cultural Cultural Heritage Management Plans Heritage Management Plans in place and these Australia Pacific LNG are being implemented across the Australia Pacific LNG project. During the 2015 financial All of the Indigenous Land Use Agreements year, there were no recorded breaches to our (ILUA) for the main pipeline and gas fields are Cultural Heritage Management Plans. complete. At the end of the 2015 financial year there were eight registered ILUAs and Halladale and Speculant project four Rights To Negotiate agreements in place, one of which was agreed and registered during At the end of the 2015 financial year, there the reporting period. We are committed to were two Cultural Heritage Management Plans continued engagement with Aboriginal and in place at our Halladale and Speculant project. Torres Strait Islander communities. No breaches to these Plans were recorded during the period.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENERGY DEVELOPMENTS 19 Drilling wells WATER MANAGEMENT To extract gas, we use wells that are encased WATER MANAGEMENT Why it is important in steel and sealed with cement to prevent any AT A GLANCE water and CSG from entering the surrounding Effective and responsible management of water rock formations and mixing with aquifers. is important for our business, the community OUR PURPOSE and the environments in which we operate. Our Well Integrity Management Plan prescribes Manage our impacts on water We come into contact with water in many the monitoring and maintenance required to resources to ensure water of our activities, including gas production provide assurance that wellbores comply with security for our business and and power generation, and we understand the Queensland Government Code of Practice. other water users. that how we use, re-use or dispose of water Our well construction, design and operations is of considerable interest to a wide variety are also mandated with this Code of Practice. Laws and regulations of stakeholders. Hydraulic fracture stimulation, or fraccing, Water management is governed Water management is a key issue at two is a process that is applied to some, but not by extensive federal and state assets, the Australia Pacific LNG project for all CSG wells. It has been used safely around laws and regulations including which Origin is Upstream operator, and the the world for several decades. Hydraulic the Environment Protection and Eraring Power Station. The two business fracturing involves pumping a fluid mixture Biodiversity Conservation Act activities are described separately below. of predominantly water and sand under 1999 (Cth) and Queensland’s pressure through the wells to open existing In the 2015 financial year, the total volume rock, to improve the flow of gas to the CSG Water Management Policy of water withdrawn across Origin’s activities and Water Act 2000. surface. The additives used in fracturing increased by approximately six per cent to fluids are regulated by the Queensland (1) Water use is governed by various 2,588,958 ML . The majority (99 per cent) Government and are listed on the Australia (2) state licences. of water withdrawn related to our activities Pacific LNG website. at the Eraring Power Station, with most Our additional actions of this water returned to Lake Macquarie. In the 2015 financial year, 37 wells or approximately 10 per cent of all wells Origin has constructed an The majority of the remaining water is produced drilled required hydraulic fracturing. integrated water distribution water withdrawn by Australia Pacific LNG, system at Fairymeadow which totalled 16,760 ML in the 2015 financial Monitoring underground water systems year. Of this, approximately 87 per cent was Road, Queensland, delivering Our knowledge of hydrogeology is continually converted to clean water for beneficial use. 8,160 ML of treated CSG water being updated through the drilling of new to landholders this year. Water at Australia Pacific LNG water bores and CSG wells; geological analysis of information obtained from this drilling, The first operational aquifer Approach to CSG water management injection schemes by the CSG the establishment of monitoring wells industry have been developed Origin’s CSG water management programs and monitoring systems, and the analysis by Origin at two sites to help take into account legislative requirements of groundwater pressure and water quality replenish the Great Artesian and conditions specified in our permits and data collected by these systems. agreements with stakeholders. We endeavour Basin reserves. There are currently more than 127 monitoring to minimise our reliance on external water points installed by Origin as part of Australia resources and maximise the treated water Our approach Pacific LNG. we can provide for use by others. Our water management We regularly engage with stakeholders, including Make Good agreements program is governed by strict governments and scientific organisations such CSG related water extraction is generally conditions imposed by law, and as CSIRO and Gas Industry Social & Environmental we make additional commitments not expected to significantly impact farm Research Alliance (GISERA), as we implement groundwater supplies. However, in some as outlined in Origin’s Water ongoing research and monitoring programs Management Directive. cases CSG activity could affect bore water to quantify and predict the potential impacts, levels in specific locations. Where reduced risks and benefits arising from our water use. Our performance groundwater availability is identified as a result As the Upstream operator, we manage water of CSG production, we are required to make In the 2015 financial year, the at Australia Pacific LNG by: good any impacts. total volume of water withdrawn —— studying and monitoring underground The Surat Underground Water Impact across Origin’s activities increased water systems; Report initially identified 40 bores for Make by approximately 6 per cent —— drilling wells which extract water and gas (1) Good agreements with Australia Pacific LNG. to 2,588,958 ML . from coal seams; As we progress through ongoing operations —— pumping extracted water, which is typically and assessments, bores may be added or brackish, up the wells and via gathering removed from the Make Good agreements pipelines to water treatment facilities; assessment list. —— treating the extracted water at water At 30 June 2015, there were 47 bores treatment facilities to remove the salt and confirmed or under assessment for Make purify it to potable quality or as applicable Good agreements amongst 28 landholders to the required quality for end use; and in association with Australia Pacific LNG. —— providing the majority of the treated As at 30 June 2015, 13 Make Good agreements water for beneficial use. had been signed by Australia Pacific LNG and 15 were the subject of ongoing negotiations Extracting water and gas with landholders. from the coal seams The production of CSG requires the lowering of water pressure within the coal seams through the extraction of some groundwater to allow gas to flow to the surface. In the 2015 financial year, produced water increased by 150 per cent to 16,760 ML, reflecting higher CSG water production associated with the commencement of all Australia Pacific LNG’s Phase 1 (1) Excluding LPG. (2) This includes surface, groundwater, rain, development wells. third party waste and Municipal water.

20 ENERGY DEVELOPMENTS INNOVATIVE PROJECT SHARES TREATED CSG WATER WITH LANDHOLDERS

Australia Pacific LNG’s innovative A key element of success for this project has CSG water is treated to Australian irrigation Water to Landholders project been close engagement with landholders to standards at the Condabri and Talinga Water is delivering high-quality, treated secure pipeline licences, gain access to land and Treatment Facilities via reverse osmosis. CSG water to participating farmers provide irrigation quality water while completing The water is then distributed through complex tasks in parallel. By spending time with the pipeline that runs along Fairymeadow via a purpose-built pipeline along the local landholders and listening to what they Road, and is either provided to landholders, Fairymeadow Road, near Miles wanted, we have delivered a very positive or sent to the Monreagh Dam, which in Queensland. outcome for the local community. provides a buffer to balance the water Launched in April 2014, the Fairymeadow Road production and landholder demand. Irrigation Pipeline scheme has been developed The scheme is a practical application to maximise the beneficial use of the treated of the Queensland Government’s Coal water produced from Australia Pacific LNG’s Seam Gas Water Management Policy (2012) Condabri and Talinga gas facilities over the which requires CSG companies to find next 15 to 20 years. beneficial uses for treated CSG water, The project, delivered by Origin on behalf of and demonstrates how the agricultural Australia Pacific LNG, involved the construction and resources industries can work together of a 1,873 ML irrigation storage dam located to develop shared benefits. on Origin’s Monreagh property, a pump station located at the dam, a 22-kilometre pipeline along Fairymeadow Road, and offtake points for each of the seven participating landholders.

ABOVE Miles landholder Ash Geldard, is part of Australia Pacific LNG’s Water to Landholders project.

DISCOVER MORE ONLINE

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENERGY DEVELOPMENTS 21 Treating CSG water River releases CSG water naturally contains high salt We currently have regulatory approval for levels, which generally means that it needs releases of treated water to rivers. We are to be treated before it can be considered required to monitor sections around our release for other uses. points along the rivers, and identify and describe Origin has installed a combined CSG water the extent of any adverse environmental treatment capacity of 112 ML per day across impacts on the local environmental values four water treatment facilities. The water sent associated with our activities. is treated via filtration and Reverse Osmosis In the 2015 financial year, releases to rivers (RO) to remove dissolved salts and impurities. decreased 61 per cent to 476 ML, reflecting The treatment process has a capacity to convert the increase in the delivery of treated water approximately 87 per cent of produced water to beneficial uses such as irrigation. to clean water which is suitable for a range of beneficial uses by others. The remaining Brine management portion, which contains the removed salts, The salts which are removed during the is directed to brine ponds. RO process are captured within a brine waste Of the 16,760 ML of produced water withdrawn stream, which is sent to specifically designed during the period, approximately 14,581 ML and lined brine ponds to undergo further or 87 per cent was converted to clean water evaporation and concentration. The base for beneficial use. case for the management of brine generated from our water treatment process, as identified Water for beneficial use in Australia Pacific LNG’s approved Environmental We consult with local communities and Impact Statement, is the crystallisation In the 2015 government to determine the preferred of salts and disposal of the salt in a suitably uses for treated water. In March 2014, designed landfill which is managed under financial year, we constructed the Fairymeadow Road strict regulations. the Fairymeadow Irrigation Pipeline Scheme to provide As we develop our long-term Brine Management treated water from the Talinga and Condabri Strategy, we manage our brine ponds and pond Road Irrigation water treatment facilities to landholders development to ensure Australia Pacific LNG to supplement both existing and new has adequate capacity to meet its ongoing Pipeline Scheme irrigation and stock watering. production needs. supplied 8,160 ML During the reporting period, river releases of CSG water decreased while other uses, including irrigation Water for our power generation activities and aquifer injection, substantially increased. Water is used in the operation of Origin’s coal to landholders. and gas-fired power plants. Water to landholders The black coal-fired Eraring Power Station in The Fairymeadow Road Irrigation Pipeline New South Wales uses the vast majority of our Scheme provides irrigation water to seven water in this part of the business. The extraction participating landholders along Fairymeadow of water to support power generation activities Road. In the 2015 financial year, the scheme is regulated by operating licences. CSG WATER MANAGEMENT (ML)(1) applied 8,160 ML of CSG water to landholders. At Eraring, water is managed in accordance Our Water to Landholders program is outlined with a documented Water Management Plan. further on page 21 of this report. The power station uses water for operations,

8,160 fire services and domestic use, and utilises water Aquifer injection from Lake Macquarie for cooling. Following In western Queensland, there has been some its use, this water is returned to Lake Macquarie groundwater decline over the past 100 years with minimal evaporative losses. The location as water has been withdrawn to support towns of the power station on the shores of Lake and sustain industry and business. Aquifer Macquarie and its design becomes particularly injection offers the potential to replenish important during periods of water scarcity.

2,927 depleted aquifers using treated water. Eraring has a comparatively lower impact During the 2015 financial year, Australia Pacific on the local water supplies compared with 1,961 1,808 LNG’s aquifer injection schemes at Reedy Creek power stations reliant on other municipal 1,224 water supplies.

589 and Spring Gully commenced operation with 476 145 53 a combined injection capacity of 48.1 ML per day. In the 2015 financial year, the volume of Eraring Power Station FY13 FY15 FY13 FY15 FY13 FY15 FY14 FY14 FY14 CSG water used for aquifer injection increased In the 2015 financial year, the total volume significantly to 1,808 ML as the program of surface water used by the Eraring Power Irrigation Aquifer River transitioned from trial to production. Station for cooling purposes increased by reinjection releases The aquifer injection programs developed 4.9 per cent to 2,568,737 ML, which is directly by Origin are the first within the CSG industry attributable to an increase in power generation. in Queensland. The Reedy Creek aquifer For the 2015 financial year, the Eraring Power injection scheme is currently the largest Station generated 13,320 GWh of electricity, treated water managed aquifer recharge which represented a 17 per cent increase scheme in Australia, with design capacity on the previous financial year. to replenish the aquifer with 40 ML Our licence conditions permit the return of treated CSG water per day. of a maximum of 11,000 ML of salt water per day to Myuna Bay in Lake Macquarie via the outlet canal, with a maximum temperature of 37.5 degrees Celsius. In the 2015 financial year, we operated within this temperature limit every day of the period and returned an average of 7,018 ML per day, up from an average of 6,684 ML per day in the prior year. (1) This chart excludes water held in storage and water used for construction.

22 ENERGY DEVELOPMENTS In the gas fields, three Regional Community IMPACT ON COMMUNITIES Consultative Committees in Maranoa, Western Downs and Banana Shire provide forums where IMPACT ON Why we must manage our impact we engage with local communities. Established COMMUNITIES Our operations involve construction and in 2011, they regularly meet with community AT A GLANCE operation of large-scale infrastructure such representatives to discuss current challenges, as power stations, gas processing facilities, and what can be done to address them. pipelines as well as smaller scale infrastructure These forums will continue to provide us OUR PURPOSE such as CSG gas wells. This infrastructure with important feedback as the project Minimise our impact on is typically located in rural and regional transitions to operations. communities in association with the Australia Pacific LNG project. areas with varying degrees of impact on We hold regular meetings with local local communities. The life of energy assets governments, government departments Laws and regulations can be several decades, so we have a long and community organisations, attend term presence in the communities in which community events and functions, and The Queensland Coordinator- we operate. advertise in local media outlets to provide General approved Australia Pacific We respect the rights and interests of communities with information about, and LNG’s Environmental Impact communities by listening to people to understand to seek feedback on, our activities. Statement and Social Impact their feedback and concerns about our activities. We also continue to invest in research Management Plan with strict We seek to respond to identified community to better understand the impacts of the conditions and these form the needs and invest in measures to alleviate the broader CSG industry through a $10 million basis of our approach. environmental, economic and social impacts commitment to GISERA, which Australia of our operations. Our Community Directive Pacific LNG established in 2011 with the Our additional actions guides how we do this. CSIRO. In March 2014, QGC also joined the With the CSIRO we established When we are involved in large, capital-intensive alliance. During the 2015 financial year, the GISERA, a major research alliance energy projects, such as the Australia Pacific socio-economic research team contributed which studies the socio-economic LNG project, people living near our operations to various peer review papers, and technical impacts associated with the can be affected by increased traffic, noise reports, covering issues around reversal CSG industry. and dust. They may also be affected by of rural community decline, community socio-economic factors, such as increased resilience and community expectations Our approach housing costs and competition for labour. of the industry. These papers are available Origin’s challenge is to manage these impacts at www.gisera.org.au. We follow a rigorous process effectively, through proactive, collaborative outlined in our Community action with communities. Traffic and transport Directive which includes Increased traffic and use of large transport community engagement, Managing project impacts vehicles on local roads continues to be one impact assessment, mitigation on local communities of the most visible impacts of the Australia strategies and ongoing Australia Pacific LNG is the largest project Pacific LNG project. While our presence on monitoring and reporting. in which we are currently involved, and also local roads reduces as the project transitions the project with the most significant impact from construction to operations, road safety Our performance on its neighbouring communities. Origin has remains a high priority for the community. In the 2015 financial year, a 37.5 per cent interest in Australia Pacific LNG We have implemented a range of road safety we launched a driving simulator and is the Upstream operator, responsible for measures such as restrictions on vehicle speed – Road Safety program in development of the gas fields and the pipeline limits, movements in peak periods including partnership with the Queensland that connects the fields to Curtis Island, Christmas, and in-vehicle monitoring systems. Police-Citizens Youth Welfare located off the coast of Gladstone. We have also invested in road infrastructure Association, and completed the The management of impacts associated with to upgrade busy roads and repair any damage development of our second this project is governed by a Social Impact caused by traffic increases. affordable housing project Management Plan (SIMP), which identifies We have also contributed to a CSG industry in Roma. actions Australia Pacific LNG will undertake Logistics Safety Code of Practice, and our Land alone or in cooperation with its contractors Transport Directive puts in place measures and other stakeholders to mitigate negative for employees, contractors and suppliers social impacts arising from the project on the to minimise the risk of traffic incidents. communities in which it operates. The SIMP In the 2015 financial year, we launched provides for specific actions relating to housing, a driving simulator to build the confidence and workforce training, community health and competency of local drivers behind the wheel. safety, as well as community investment, The Road Safety program is in partnership with local content and land access. It is available the Queensland Police-Citizens Youth Welfare to download from the Australia Pacific Association. The mobile program operates LNG website. throughout the Darling Downs and Surat Basin At the end of the 2015 financial year, the region, based out of Police Citizens Youth Clubs Australia Pacific LNG project was transitioning (PCYC) in Roma, Dalby, Toowoomba and Biloela. from its construction phase to its operations Four state-of-the-art driving simulators are phase, bringing with it changes to the nature permanently stationed at the PCYC centres. of these impacts. To understand these changes to impacts and identify opportunities to build capacity in the community during the transition of operations, we undertook targeted stakeholder engagement during the year. We will continue this engagement as we develop and implement our updated impact management and community development plans with a focus on local spend and employment opportunities.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENERGY DEVELOPMENTS 23 RIGHT A mix of two and three bedroom townhouses was funded by Australia Pacific LNG in partnership with Maranoa Regional Council and non-for-profit housing provider Horizon Housing.

Housing affordability The role of the Eraring Power Station COMMUNITY COMPLAINTS RECEIVED Australia Pacific LNG’s housing strategy Community Forum is to: has targeted population centres near our —— enhance communication between

195 gas fields, providing funding towards private Origin and the local community; housing market development and affordable —— enhance Origin’s understanding housing programs. of community issues in relation to While the composition of our workforce Eraring Power Station as they arise; —— enhance stakeholder and community

131 at the Australia Pacific LNG Upstream project is changing, housing affordability still affects understanding of Origin and Eraring many regional areas in which we operate. Power Station; and —— provide a forum through which stakeholder During the 2015 financial year, we completed and community input into proposed the development of our second affordable 67 community development activities housing project. Located in Roma, the housing can be sought. was built in partnership with Horizon Housing Origin is also a member of the Lake Macquarie

25 and Maranoa Regional Council. A total of City Council Coastal and Estuary Management

11 10 new two and three bedroom townhouses 7 will help increase the availability of quality Committee and the Lake Macquarie City affordable housing in the Western Downs Council Air Quality Reference Group. FY15 FY15 FY15 FY14 FY14 FY14 and Maranoa regions. Managing community complaints In February 2015, we also formalised Australia Other Energy Across Origin, we seek to actively monitor Pacific Integrated Markets an agreement with Horizon Housing feedback from the community and provide LNG Gas projects to invest up to $2 million to purchase formal mechanisms for recording and existing dwellings in Miles to rent affordably. responding to complaints. The majority This initiative completes our investment of community complaints received by Origin in affordable housing for the construction relate to the Australia Pacific LNG project. phase of the Australia Pacific LNG project. In the 2015 financial year, Australia Pacific Managing community impacts LNG received 131 complaints from the across our generation portfolio community in relation to its gas field activities. Origin has assessed the potential for our Complaints were predominantly related to power generation fleet to impact on the concerns about workforce behaviour, traffic communities in which they operate. Four and transport, local content, dust and noise. of our power stations have the potential There has been a steady decline in the receipt to significantly impact the community, of complaints compared to previous periods, for varying reasons. which is consistent with the Australia Pacific At 2,880 MW, Eraring Power Station in LNG project moving from construction to New South Wales is both Origin’s and Australia’s operations. In particular, traffic and transport largest power station. Eraring plays a critical complaints have reduced significantly, role in providing a reliable and secure supply highlighting our reduced presence of electricity to the people of the state. on local roads. Potential impacts on the community arising Complaints are typically managed in line from the power station include visual amenity, with our internal grievance procedures. At the dust from the black coal which fuels the end of the 2015 financial year, there were five power station and water quality. complaints relating to Australia Pacific LNG; The Eraring Power Station Community and two complaints relating to our Energy Forum was established in December 2002 Markets business which are pending resolution. to provide a platform for dialogue with Across our other Integrated Gas projects community representatives. all complaints were resolved.

24 ENERGY DEVELOPMENTS At the end of the 2015 financial year, SHARING ECONOMIC BENEFITS expenditure on Australia Pacific LNG had reached $25.0 billion(1). A significant proportion SHARING ECONOMIC Creating economic value for communities of Australia Pacific LNG expenditure has been BENEFITS AT A GLANCE When we build and operate our facilities incurred on goods and services in Australia. we create economic value. Our energy OUR PURPOSE developments often require significant capital Encouraging local employment Share economic value expenditure with local, regional and national Origin, as the gas fields and pipeline operator generated by our operations communities benefiting through: for Australia Pacific LNG, is a major regional and developments. —— procurement of goods and services employer. At the end of the period, Origin

from local suppliers when possible; employed 736workers at the Australia Pacific Laws and regulations —— creation of employment opportunities; LNG project, which remained stable on the —— investment in needed community prior period(2). The Australia Pacific LNG infrastructure and services; and Through the Surat Basin Live Local financial Environment Impact Statement —— payment of taxes and royalties. incentive, Origin and Australia Pacific LNG and Queensland Coordinator- Origin’s approach to distributing economic also encourages permanent employees to General’s report on the EIS benefits to local communities is outlined relocate to the region. At the end of the period, guide how we create value in our Community Directive. We aim to 283 Origin employees lived in the region, from our activities. take a sustainable and long-term approach an increase of 12 per cent on the prior period. to providing value to local communities, Our additional actions Increasing Indigenous participation by ensuring that the regions in which we We employ a dedicated Local in our business operate can sustain themselves as well Content Team and implement as our operations during and after the During the period, we introduced a number a Regional Buy Program. development of every project. of initiatives to increase Indigenous participation We endeavour to tailor our activities in our business. Through our support of the Our approach to the specific needs and aspirations Thornhill Indigenous Training Centre and of the communities in which we operate. partnership with Many Rivers, we have focused A Local Content Strategy guides In our experience, local businesses and on supporting Aboriginal and Torres Strait how we create opportunities for other community members are keen Islander peoples’ access to skills, training local businesses to participate in to participate in our projects through and small business development. the Australia Pacific LNG project. employment or as suppliers of goods Our performance and services. While we strive to meet Community investment these aspirations, we also recognise that In the 2015 financial year, Origin invested Since commencement of the businesses in small, regional communities $8.9 million in the communities in which Project, Origin as the Upstream (3) cannot always meet the demands it operates. A total of $8.4 million related operator of Australia Pacific of large-scale energy projects. to expenditure at Australia Pacific LNG. LNG has spent $18.3 million The Australia Pacific LNG project is the largest on community investment. Community investment initiatives project in which we are currently involved, at Australia Pacific LNG and creates significant economic benefits at a regional, state and national level. For Australia Pacific LNG, our regional community investment programs are designed AUSTRALIA PACIFIC LNG UPSTREAM COMMUNITY INVESTMENT Procuring local goods and services to support sustainable population growth, $18.3 MILLION BY THEME(4) (%) The Australia Pacific LNG project’s Local the development of skills, education and Content Policy and associated strategy training, community safety and wellbeing, outlines how we provide opportunities for and natural resource stewardship. 2 local businesses to participate in the project. Since commencement of the project, Origin, 20 The strategy includes training and development as the Upstream operator of Australia Pacific initiatives to build capacity in local businesses, LNG, has spent $18.3 million on community as well as our Regional Buy Program. Australia investment. The types of community investment Pacific LNG employs a dedicated team to are illustrated in the adjacent chart. 18 implement its Local Content Strategy. During the period, we also committed to new 60 During the period, more than 360 suppliers programs in the areas of emergency services attended our Regional Buy Program workshops and Indigenous training as follows: in the Surat Basin. Regional suppliers are —— Queensland Fire and Emergency Services a defined group within our Local Content (QFES) provides important emergency Policy and require additional support to services across the Surat Basin. Australia Sustainable population growth ensure inclusion in commercial opportunities, Pacific LNG partnered with QFES, Skills, education and training and competitiveness in providing goods contributing $663,700 for the purchase and services. Our dedicated team also of defibrillators, slip on units, trailer units, Community safety, health and wellbeing helps suppliers to identify and capitalise lighting units and lighting trailers and on regional buy opportunities associated distributed amongst the Rural Fire Natural resource stewardship with the operational and maintenance Service and the SES; requirements of the project. —— The Thornhill Indigenous Training (1) Includes an unfavourable foreign exchange Since 2011, Australia Pacific LNG has Centre delivers CSG-LNG industry- translation impact of A$362 million referred businesses to Queensland’s relative to project cost estimates focused training, including programs in announced in February 2013, which Department of State Development, camp management, hospitality, transport were based on 31 December 2012 Infrastructure and Planning for business and security. Australia Pacific LNG has exchange rates and around diagnostics and development. This has $500 million of accrued expenses. committed $482,000 to part fund an (2) Employee numbers for FY2014 enabled local businesses to develop skills upgrade of the Centre. This upgrade will restated to 748. and become pre-qualified for our project, increase the capacity of the Centre, with (3) This is calculated as community as well as other projects in the region. investment including infrastructure 15 per cent of placements reserved for investments and services supported, As Australia Pacific LNG transitions Indigenous peoples from the Western programs undertaken either as to the operations phase, the team Downs, Maranoa and Banana Shire economic development or impact mitigation, in kind contributions will continue building local capability over the next five years. or work undertaken pro bono in through collaboration with state accordance with our Social Impact and local governments. Management Plan. (4) As at 30 June 2015.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENERGY DEVELOPMENTS 25 Creating lasting value —— Origin’s support for the Queensland through regional investment CSG Industry Schools Program continued In the 2015 financial year, our long-running for its second year. The program is community investment programs and designed to raise the profile, awareness partnerships continued in the following areas: and participation in science, engineering; mathematics and technology among —— Origin’s Community Skills Scholarships students in the Surat Basin; program has supported more than 157 local apprentices by funding scholarships —— The Origin Schools program is open with a total value of up to $2 million, to students from state and independent as at 30 June 2015; schools throughout the Surat Basin, from Dalby to Roma and surrounding —— Origin continued its work with the communities. The programs are delivered Queensland Government to support by approved third-party educational the Western Downs Regional Council program providers and include the to deliver the Miles water and sewerage Wonders of Science program run treatment plant and network upgrade. by the Academy of Technology Australia Pacific LNG contributed Sciences and Engineering, the Power $1.4 million towards the $24.4 million of Engineering program run by Power upgrade, which became operational of Engineering Inc.; the Try A Trade in 2015. Importantly, the project program run by Construction Skills alleviates the pressure on the town’s Queensland and QMI Solutions; treated drinking water supplies by and Re-Engineering Australia’s F1 providing additional capacity to meet in Schools Technology Challenge; population growth; —— The Health Research Partnership with the Wesley Research Institute and Australia Pacific LNG is a two-year research project. The institute conducts research into regional health issues to better inform private and public investment in health improvement initiatives. Origin, as the Upstream operator, has committed $500,000 towards this initiative which is matched with funding from the Downstream operator, ConocoPhillips; and —— Origin’s partnership with Many Rivers provides support for Local Traditional Owners and Indigenous Australians to develop their own business or entrepreneurial venture. Many Rivers is a not-for-profit organisation that offers local enterprise development, practical FIGHTING FIRES AND business support, and finance to support HAZARDS IN QUEENSLAND individuals and small start-up businesses. We have worked with the Department of State Development, Infrastructure and Planning to identify a number of Australia Pacific LNG entered into The partnership between Origin businesses that are ready to harness a one-year sponsorship agreement and Queensland Fire and Emergency the type of support offered by Many of more than $660,000 to support Services ensures that rural fire Rivers, to both the Indigenous and community safety projects for the fighters and volunteers on the front non-Indigenous communities in the Rural Fire Service Queensland and SES Darling Downs. line are better equipped to protect in the South West Region in December communities for the long term. 2014. It will also include an update to the Chinchilla Airbase, providing Rural fire brigades and State Emergency a strategic base during times of natural Service groups across South West disaster, with a rapid, cost effective Queensland have been boosted by and efficient air operation. donations of equipment and improvements to infrastructure from Origin, on behalf QFES Commissioner Katarina Carroll of Australia Pacific LNG. This enables local thanked Australia Pacific LNG for its support brigades and Origin to better manage fire which has already delivered nine Automatic and hazard mitigation activities in areas External Defibrillators to rural and auxiliary that may affect our infrastructure, fire stations, in Chinchilla, Roma, Miles and employees and the community. Injune. In addition, 24 lightweight lighting units have been delivered to 12 SES groups and storage facility upgrades have been completed in Chinchilla, Miles and Tara to ensure SES volunteers can adequately maintain life-saving equipment. “We’ve also seen 10 slip on and 10 trailer portable fire fighting units distributed to ABOVE 20 rural fire brigades across South West Origin, Manager Natural Resources, Scott Cawley Queensland in recent months. These units with QFES Commissioner Katarina Carroll, Richard Schokman (QGC), Miles Fire Station captain Ray will equip brigades for what is forecast Duncombe (in fire truck) and Toowoomba Regional to be a busy bushfire season.” Communications Manager Gail Moran.

26 ENERGY DEVELOPMENTS CONTRIBUTING TO THE COMMUNITY

Origin joins Western Downs The capital works project in Miles Regional Council and the Queensland is a significant and successful collaboration “What the CSG Government to provide the Miles to deliver essential infrastructure for community with robust, essential the local community, creating a strong Industry and the and lasting outcome for the region. utilities infrastructure that will energy sector has meet the needs of the township Council Mayor Ray Brown welcomed the contribution when speaking with the ABC TV’s well into the future. done with Western Landline program in June 2015, “What the Downs over the Origin, together with the State Government, CSG industry and the energy sector has done contributed funds to the Western Downs with Western Downs over the past two years past two years Regional Council’s Wastewater Treatment is to upgrade the infrastructure that should is to upgrade the Plant project in Miles, which included a new have been upgraded over the past 50 years. $6.6 million reverse osmosis potable water “So the last time we had major upgrades infrastructure that treatment plant, recycling scheme, and to our water and sewerage was actually after should have been utilities pipeline upgrades. the Second World War. So we’ve renewed The new pieces of infrastructure are everything. So for the next 50 years, we’ve upgraded over the designed to boost the overall capacity got a very good legacy ahead of us,” he said. past 50 years.” of the existing Miles treatment plant to ensure residents have a reliable and Ray Brown consistent supply of good quality drinking Western Downs Regional Council Mayor water. As part of the project, a recycled water scheme for open space irrigation will be developed, alleviating pressure on the town’s potable or treated drinking water supplies. Miles Golf Course will be the first beneficiary of the recycled waste water.

ABOVE The town of Miles in Queensland, where Origin contributed to the upgrade of the water and sewerage network.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENERGY DEVELOPMENTS 27 Assessing and minimising BIODIVERSITY biodiversity impacts BIODIVERSITY Our assessment process identifies whether AT A GLANCE Why it is important biodiversity may be impacted or placed At Origin, we take seriously our responsibility at risk by a specific project, site or activity. OUR PURPOSE to manage the environment. We are committed During this process we record: Manage, mitigate or offset to minimising the impact of our operations —— legally protected or recognised areas adverse biodiversity impacts, to the biodiversity of the areas in which and species; and where possible enhance we operate. Our development activities and —— species, ecosystems and natural areas biodiversity values. operations span both marine and terrestrial with special conservation status, such as environments across a wide geographical area, conservation-significant flora and fauna, Laws and regulations and therefore have the potential to impact and rare and threatened species listed a range of plants, animals, micro-organisms regionally and nationally; In Australia, biodiversity and their ecosystems. —— vegetation and habitat condition, fauna management is governed by We seek to identify and assess biodiversity movement corridors and species diversity; the Environment Protection and values and where impacts are likely, implement —— biodiversity considered to be of significant Biodiversity Conservation Act 1999 measures to mitigate them. The scale of the value; and (Cth) (EPBC) as well as various Australia Pacific LNG project has the greatest —— views of relevant external and internal state-based legislation. potential to impact biodiversity and is the stakeholders. Our additional actions primary focus of this section. Once the biodiversity assessment is complete, Managing biodiversity impacts is important site construction plans are developed to minimise Australia Pacific LNG supports to many of our stakeholders, including state our impact and avoid potential threats to the terrestrial and marine biodiversity and federal governments, communities and viability of species or communities. We undertake research through GISERA. conservation groups. Strict government activities in a way that minimises habitat loss regulations result in the thorough and and/or degradation. We try to ensure there Our approach transparent management of biodiversity. is no negative impact on biodiversity outside authorised activity areas, taking care to avoid Origin’s assessment process introducing weeds and pests that may have identifies whether biodiversity Our approach to managing biodiversity Origin aims to identify potential biodiversity an impact. If protected flora or fauna is located may be impacted or placed at risk. within an area of activity and disturbance is We then undertake our activities impacts and develop and implement mitigation measures or offsets to reduce biodiversity risks unavoidable, we implement where appropriate, in a way that minimises impacts programs to compensate for these impacts. on biodiversity values and tries and where possible enhance biodiversity values. These measures include the protection of high to ensure there is no impact Our 2015 performance outside of authorised areas. biodiversity values and related potential impacts across marine and terrestrial environments. The Australia Pacific LNG project’s gas fields are located in Queensland’s Surat Basin on the Our performance Legislative requirements for managing Western Downs. The operational area of Phase 1 biodiversity impacts vary between individual In the 2015 financial year, of the project covers approximately 742,000 countries and states. In Australia, our approach our projects posed no material hectares. The area is active with agriculture, to managing biodiversity has to comply with the danger to threatened species mining and transport and includes a wide band requirements of the Environment Protection and or ecological communities, of Acacia wooded grassland between coastal Biodiversity Conservation Act 1999 (Cth) as well and there were no unauthorised tropical rainforest and the semi-arid interior as various state-based legislation. disturbances in or adjacent to, of Queensland. The clearing of remnant protected areas or areas of high For the Australia Pacific LNG project we are vegetation for wells and infrastructure and conservation value outside required to obtain the necessary environment the associated impact on terrestrial vegetation of protected areas. approvals. Our approval conditions require and fauna species is the most significant us to complete ecological and pre-clearance biodiversity impact of the project. surveys for our proposed areas of disturbance. As the Upstream operator of Australia For those activities that potentially disturb Pacific LNG, we implement threatened species threatened ecological communities and flora management plans. These plans are available and fauna species listed under EPBC (Matters on the Australia Pacific LNG website. of National Environmental Significance) these survey reports are published on the Australia In the 2015 financial year, there were no Pacific LNG website. unauthorised disturbances in or adjacent to protected areas or areas of high conservation Planned disturbance and reinstatement value outside of protected areas. is detailed in the Plan of Operations for the Australia Pacific LNG operating areas. For the actual disturbed areas, our conditions of approval require reinstatement and rehabilitation(1) to an agreed land use.

(1) Environment Protection and Biodiversity Conservation Act, 1999 (EPBC Act).

28 ENERGY DEVELOPMENTS Offsets The Dukes Plain offset addresses the Australia Pacific LNG’s offsets aim to secure majority of our gas field offset obligations. strategic environmental areas with the following We commenced negotiation with a landholder values: Great Barrier Reef World Heritage for an additional direct offset site to fulfil the values; threatened ecological communities; remainder of the Phase 1 state and federal endangered and of concern remnant and high project offset requirements in early 2015. value regrowth vegetation; marine habitat; In May 2015, the Inverness Offset Area wetlands; watercourses; threatened flora; Management Plan was approved by the state and habitat for threatened fauna. and federal governments. The management During the 2015 financial year, substantial plan identifies the objectives and actions to progress towards providing direct offsets be undertaken in the offset area, including and indirect offsets were made. the establishment of Cycas megacarpa and Acacia pedleyi. We also finalised negotiations Direct offsets with the landholder to legally secure the offset area through a voluntary declaration Australia Pacific LNG’s two key offsets in the in June 2015. gas fields are at Dukes Plain and Inverness. The Dukes Plain property is located south During the 2015 financial year, 261 individual of Theodore in Central Queensland and will species of Cycas megacarpa were successfully provide offsets for threatened ecological translocated in accordance with the Cycas communities, endangered and of concern megacarpa Management and Translocation Plan vegetation and associated threatened to the Inverness offset area. In addition, a total fauna habitat. The Inverness offset property of 1,600 salvaged and propagated Rutidosis is located on the ranges west of Gladstone lanata individuals were translocated to the and is where translocation of threatened flora Rockwood offset area in September 2014. species removed from the pipeline corridor There were is taking place. Indirect offsets In December 2014, a draft of the Dukes Plain Australia Pacific LNG continues to support the no unauthorised Offset and Rehabilitation Management Plan was conservation of the Fitzroy River turtle through disturbances submitted to the Federal Government detailing a nest protection program managed by Greening the conservation outcomes and management Australia and the Fitzroy Basin Association. in or adjacent to objectives for Brigalow and semi-evergreen During the year’s nest protection survey protected areas vine thicket threatened ecological communities period from September to December 2014, and associated threatened fauna habitat. 41 nests were protected or successfully hatched. or areas of high The offset and management plan has been Three hundred turtle hatchlings safely left the conservation developed with inputs from extensive field nests to return to the surrounding environment. surveys and advice from scientific experts. The predation rate observed in the survey value outside of On-ground management activities including area was successfully reduced to 53 per cent, protected areas. trials to optimise the growth of Brigalow, an improvement on the 65 per cent obtained ecological and cultural heritage surveys for in the prior period, and significantly better the establishment and maintenance of fire than the 90-100 per cent predation rates breaks and pest and grazing management observed in previous years where no BELOW Australia Pacific LNG’s right of way for activities were also implemented across the protection activities occurred. its main pipeline has been rehabilitated Dukes Plain property during the period. and revegetated.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 ENERGY DEVELOPMENTS 29 Our additional actions To reduce the potential for interactions with In the 2015 financial year, Australia Pacific these marine animals, we timed the survey LNG continued to support terrestrial and to start after the southern right whale calving We timed the survey marine biodiversity research through GISERA. season and finish before the peak of the blue to start after the Research projects conducted in the reporting whale migration period. Aerial surveys were period included the following: conducted prior to commencement of the southern right whale seismic survey to provide confidence that —— priority threat identification, management southern right whales had left the region. calving season and and appraisal (terrestrial biodiversity); During the survey, 12 experienced marine end before the peak —— fire ecology of grassy woodlands mammal observers were stationed across (terrestrial biodiversity); five vessels and were authorised to stop the of the blue whale —— habitat selection by two focal species; and survey if whales were sighted within defined migration period —— an integrated study of the Gladstone distances from the acoustic source. Separate marine system (marine environment). sightings of humpback whales occurred during to ensure minimal the survey but no blue whales or southern Other biodiversity impacts interaction. right whales were sighted. Outside of the Australia Pacific LNG project, our other gas development projects posed no material danger to threatened species or ecological communities, with regard to biodiversity impact. In addition, there were no unauthorised activities or incidents that materially impacted biodiversity in any project areas. During the 2015 financial year, we undertook the Enterprise 3D seismic survey in a near shore area of the Otway Basin in Victoria. This area is a potential habitat for three threatened marine mammal species: the blue whale (Balaenoptera musculus), the humpback whale (Megaptera novaeangliae) and the southern right whale (Eubalaena australis).

MEASURING AND MANAGING OUR REPUTATION IN THE COMMUNITY

Effective measurement of our reputation in the community, and targeted strategies to drive improvements in our performance over time, are key priorities for Origin. Since August 2013, we have been measuring our reputation to P understand how we are perceived by ordinary Australians, as well ce rodu an cts rm /Se as some of our key stakeholders. These insights help us to create rfo rv Pe ic more targeted and effective reputation management strategies, es and ultimately feed into how we conduct our business. Reputation is important to a company, as there is a strong correlation between

I n p reputation and business performance. i n h o s v r a e t We use the RepTrak™ methodology to measure reputation. d i

o a ®

n e

The study uses the academically tested RepTrak™ model, developed L ® RepRepTTrak by the Reputation Institute. It is used by Fortune 500 companies and many Australian corporates as a standardised reputation measure. The RepTrak™ study uses a nationally representative sample of the

population to rate a company against seven dimensions: products C i e t c iz and services; innovation; governance; citizenship; leadership; e la n p sh rk performance; and workplace. i o p W Origin’s RepTrak™ score at the end of the 2015 financial year was 61.8, which was steady compared to the prior year. Origin’s G overnance quarterly scores during FY2015 averaged above the quarterly scores for FY2014.

30 ENERGY DEVELOPMENTS WE HELP EMILY MAKE THE MOST OF A SUNNY DAY We’re providing reliable, affordable and sustainable energy, including solar, to power households across Australia.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 31 DELIVERING With approximately 4.3 million customer accounts ENERGY across electricity, natural gas, LPG and solar, Origin is the leading provider of energy to homes and businesses across Australia. We are committed to providing a reliable, affordable and sustainable supply of energy to meet our customers’ needs.

These changes include: CUSTOMER CARE —— simplifying contracts and quote packs; CUSTOMER CARE —— introducing new payment options; Listening and responding —— continuing the roll out of our Customer AT A GLANCE to customer needs Service Hubs, which provide customers Origin has approximately 4.3 million customer OUR PURPOSE with a physical location they can visit accounts, making us the largest energy retailer to provide feedback and have their Ensure customers have a positive in Australia. At the end of the 2015 financial experience by understanding and concerns addressed; year, this consisted of around 2.8 million —— launching the Everyone Can Help Out meeting their energy needs, and electricity customer accounts, 1.1 million providing effective service. (ECHO) app, which allows employee- natural gas customer accounts and 382,000 generated sales leads and customer LPG customer accounts. Laws and regulations issues to be shared for follow up or Our customers depend on us to provide resolution; The Australian Energy Market a reliable, affordable and sustainable energy —— introducing stronger service offerings Agreement sets out the legislative supply that meets their needs and expectations. for small to medium businesses; and regulatory framework for That means we are not just in the business —— implementing new SMS customer updates Australia’s energy markets. of supplying energy, but also need to provide including an SMS service tailored to people Energy retailers are regulated timely and helpful advice, effective service moving house that notifies them when under the National Energy response, and assistance in accessing their meter has been installed and updates Customer Framework. other parts of the energy supply chain, them on next steps; when required. —— improving the experience of our Our additional actions Our success depends on our ability to meet commercial and industrial customers; these needs and exceed expectations, which —— refreshing and streamlining the contract We are simplifying the way is why we are committed to genuinely listening renewal process; and our customers deal with us, to our customers, continually improving their —— bringing our services to customers and we are in the process service experience and evolving our business in Canberra. of rolling out new services to ensure that we are well positioned to meet that allow us to better their future needs. A leader in green energy solutions connect with our customers. Origin is a leader in low carbon energy We continue to use traditional communication Our customer service team solutions and we continued that tradition channels, and have made significant investment is trained to understand in the 2015 financial year by supplying in new channels that make it easier for our and meet individual needs, customers with options that can offset customers to interact with us at times that and compassionately handle or lower their greenhouse gas emissions. financial hardship cases. suit them. We have around 255,000 green energy Our approach Improving products and services customer accounts, making us the largest for customers Australian provider of GreenPower and We consider each individual It is important to us that our customers have Green Gas products. customer’s needs on a case- a wide array of products and services to choose When our customers choose a GreenPower by-case basis, and do our best from, so we have introduced new products option, they nominate a percentage of to match them with the product and technologies that help make this possible. their electricity usage (anywhere between and solutions that best suit We also maintain a focus on improving our 25 per cent and 100 per cent) that they would those needs. customer service performance, and have made like to come from GreenPower accredited a number of changes to our marketing and sales renewable sources, which we match with Our performance processes affecting how and when we engage the equivalent of energy from those sources. In the 2015 financial year we with customers. For Green Gas, we purchase greenhouse achieved a 71 per cent customer gas offsets equal to the customers estimated satisfaction rating which was level usage and we are the only retailer in Australia with the prior year. We received to do so. 4.9 Ombudsman complaints These options allow our customers to directly per 1,000 customers, which support Australia’s renewable energy industry. was 26 per cent improvement However, they are not the only options on the prior year. available to customers to lower the impact of their energy use on the environment; solar has been a consistent part of our business for many years.

32 DELIVERING ENERGY At the end of the 2015 financial year, more For example, we have been measuring customer than 391,000 Origin customers have had solar satisfaction for many years by asking customers installed, representing around 27 per cent about their service experience and interaction of Australia’s solar market(1). Over the past with our service teams. This allowed us to More than 10 years, we have directly installed more compare the performance of different service than 80,000 solar PV systems and more than teams, providing a more relevant measure 391,000 Origin 4,000(2) solar hot water systems, making us one of satisfaction than market-based satisfaction customers have of the largest installers of residential rooftop surveys. At the end of the 2015 financial year, solar panels in Australia. These solar systems our customer satisfaction rating was at had solar installed, provide a clean and cost-effective way for 71 per cent which was in line with the prior year. representing households to generate renewable electricity. Going forward, we will cease using a customer around 27 per cent In May 2015, we also introduced a new way satisfaction measure and instead use a ‘strategic’ for customers to go solar, with our Solar as Net Promoter Score as our primary measure of Australia’s a Service offering. This allows a wider range of customer advocacy. In addition, we will report solar market(1). of customers access to the benefits of solar, an ‘interaction’ Net Promoter Score, which is including potentially lower energy costs and a similar measure to customer satisfaction but a reduced carbon footprint, without having more challenging, as it goes further than to purchase the system, as Origin owns, indicating a customer’s level of satisfaction installs and maintains the system throughout with their interaction with Origin; it tests the life of the Solar as a Service contract. whether they would be prepared to As some solar customers are becoming recommend Origin to family and friends. more interested in battery storage, Origin has We are also building on our customer completed extensive analysis on the battery centric culture by making sure our actions market. Our analysis focused on evaluating and behaviours address clear customer needs battery types and suppliers based on product and consistently deliver benefits. Putting flexibility, economics, and customer experience. customers’ needs at the heart of our decision As a result we have been trialing units making, operations, systems and processes in Queensland, NSW and SA, laying the is a cultural change that will take time, but foundation for a solar battery solution we have made significant progress so far. for Origin’s customers. This year saw the introduction of the ECHO app which encourages employees to log Improving call centre performance sales, service or account enquiries for family It is important to us that our customers have and friends to be followed up by specialist the best possible experience when they call case managers. This demonstrates our Origin. We have introduced a new operating recognition that true customer advocacy model for our Care and Resolutions teams starts with our employees. Allowing our that allows us to provide specialised support employees to help their family and friends, and greater sales and service capabilities. we believe will help them feel proud about working at Origin. (1) SunWiz July 2015 Monthly Insights. We use a number of mechanisms to monitor (2) FY2015 data is reported as the effectiveness of our systems and customer an 11 month actual (July-May) service initiatives. This helps us to understand + one month estimate (June). what our customers are looking for and improve the way we do things which, in turn, helps us BELOW We provide reliable, affordable and retain customers. sustainable energy to power millions of homes.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 DELIVERING ENERGY 33 Working with customers to resolve issues Regulatory requirements Delivering great customer experiences requires Origin, like other energy retailers in Australia, expertise and we make sure our people are is regulated by the National Energy Customer equipped to identify and solve potential issues Framework (The Framework). The Framework, and disputes. Origin team members undertake which includes National Energy Retail Law, regular training that develops their skills, National Energy Retail Rules and National Energy knowledge and confidence in managing a broad Retail Regulations, sets out key protections and range of complaints and concerns. We also have obligations for retail energy customers and the detailed complaint-handling procedures in place, businesses they buy their energy from. which allow us to resolve issues faster and We provide energy in New South Wales, escalate them when necessary. Victoria, Queensland, South Australia and the If a customer feels an issue has not been Australian Capital Territory and The Framework sufficiently addressed, or they aren’t satisfied applies to each of these jurisdictions except with the outcome of their interaction with Victoria. However the Victorian energy codes Origin, they are able to have the matter have recently been changed to be more in line reviewed by the relevant Ombudsman in with The Framework. their state or territory. If the case escalates In the 2015 financial year there were five to an enquiry, Origin will always work closely compliance breaches relevant to these with the customer to resolve the dispute. regulatory frameworks (that is, five provisions Complex matters arise from time to time of The Framework were breached). These that require the Ombudsman to initiate an related to late bills, wrongful disconnections investigation and request a written resolution and incorrect billing data displayed on bills. from Origin. The process is directly managed In each case the regulator was notified and, by the Ombudsman in these instances. where necessary, remedial action was taken. We’ve put a lot of work into reducing The ACCC closed two investigations relating Ombudsman complaints by improving to Origin in the 2015 financial year. our services, including stabilising our core In May 2014, the ACCC commenced business platforms, reducing the amount proceedings against Origin and two of our of late bills and streamlining the processes subsidiaries in the Federal Court of Australia, We’ve recently put that were causing backlogs. Our efforts alleging that Origin made false or misleading a lot of work into have resulted in less Ombudsman complaints representations and engaged in misleading in the 2015 financial year, falling to 4.9 per or deceptive conduct regarding the level of reducing Ombudsman 1,000 customers compared to 6.6 per discount available under a DailySaver energy complaints by 1,000 customers in the prior year. plan in South Australia. Origin settled the High bills, revised bills, and credit related dispute with the ACCC in December 2014 – improving our complaints continue to be major sources of and in February 2015, the Federal Court services, including new Ombudsman complaints and will be the handed down orders requiring Origin to pay focus of our continuing efforts to improve. a fine of $325,000 plus the ACCC’s costs and stabilising our core notify affected customers. business platforms, Overcoming barriers to contact We recognise that we could have better explained We deliver energy and services to customers our discounts, and we are committed to being reducing the amount with a diverse range of backgrounds so it is clear and transparent with our customers of late bills and important that our information be accessible about the discounts we offer. and understandable. The second matter investigated by the streamlining the We provide access to independent and ACCC related to our residential door-to- processes that were accredited translators to customers who door activities, a sales channel Origin ceased are from non-English speaking backgrounds using in September 2013. In March 2015, causing backlogs. or have difficulty accessing or understanding the Federal Court ordered Origin to pay the information we provide. We include contact $2 million in penalties in relation to unlawful details for print interpreter services on our bills door-to-door selling practices. The Court in several languages and provide large print also ordered Origin’s marketing company, and online versions of our bills to assist limited SalesForce Australia Pty Ltd, to pay penalties vision customers. and both parties to publish a joint corrective Access is provided to multi-lingual newspaper notice, maintain compliance financial counselling and energy auditors programs and contribute to the to customers enrolled in our Power On ACCC’s costs. financial hardship program. While the conduct in question was performed by a third party on our behalf, we recognise that it is our duty to ensure that anyone who represents us reflects our behaviours and values. We no longer sell energy to consumers door-to-door.

34 DELIVERING ENERGY SHARING THE BENEFITS OF SOLAR WITH MORE AUSTRALIANS

The introduction of Origin’s The team at Origin have been long-term WHY CHOOSE Solar as a Service offering supporters of solar. Over the past decade SOLAR AS A SERVICE is helping more Australian we have installed solar in around 80,000 homes and businesses access homes. Keeping with our commitment to You’ll pay $0 for the provide innovative products to our customers, system(2). the benefits of solar. we’re offering a new way for solar energy to be Installing a rooftop solar photovoltaic (PV) delivered to the home. Called Solar as a Service, You’ll lock in a low solar (3) system is a great way to reduce a home residential customers and small business owners energy rate . or business’ impact on the environment, can access the benefits of solar without having You won’t have the while also potentially delivering cost savings. to purchase the system. hassle of managing the It’s no wonder then that the popularity “Solar in Australia has evolved beyond ongoing maintenance of solar energy in Australia is soaring, the traditional installer model,” said Origin’s and monitoring of with more than 1.4 million residential General Manager Solar and Emerging the system. solar systems currently installed across Businesses, Phil Mackey. the country- the highest penetration “Under the new Solar as a Service model, of household solar in the world(1). customers don’t have to pay to have the solar system installed; instead, Origin will install, own and maintain the system over its life, taking the hassle out of solar for customers. Plus, as Origin owns the solar system, we’ll take care of any ongoing maintenance costs.” Solar as a Service works best for households that use a lot of their electricity during the day when the sun is out. This is because electricity generated from solar needs to be used as it is generated; it isn’t stored for later use. To date, the product is available in parts of New South Wales, Queensland and South Australia, with a focus on small-scale residential ABOVE Rooftop Solar PV installations in and commercial solar systems. It will shortly Australia. Solar as a Service makes it easy become available in parts of Victoria. to install and use solar energy without the need to purchase the system.

(1) SunWiz Consulting, Australian PV Market Insights, July 2015. (2) You may incur other costs in order for your property to be solar ready (such as electrical works, cabling or roof repairs) and for meter DISCOVER upgrade or changeover. MORE (3) Solar energy rate is subject to change for CPI annually and ONLINE change in law.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 DELIVERING ENERGY 35 Keeping customers informed ENERGY AFFORDABILITY Energy prices vary from state to state and ENERGY Understanding energy costs also within some states so we understand why AFFORDABILITY tariffs can sometimes be difficult for customers AT A GLANCE Australia is a large country with access to to understand. To manage this, we proactively abundant energy resources. Our energy system engage with our customers directly through bill is highly sophisticated and when compared OUR PURPOSE messages, newspaper notices, online messaging to many other countries, is very reliable. and other forms of media. This helps keep them Empower customers by providing While historically Australians have seen some informed of any price movements, including the relevant and practical solutions of the lowest cost energy in the world, recent amount, timing and reason for the changes. that allow them to control their investment in the networks of poles and wires energy use and costs, and The repeal of the Australian Government’s that transport energy and the implementation to support customers dealing Carbon Pricing Mechanism had a major impact of various state and federal government clean with financial hardship. on the structure of energy tariffs and customers’ energy schemes have contributed to higher energy costs during the 2015 financial year. Laws and regulations energy prices for customers. This legislation was passed on 17 July 2014, In most states, the increase in electricity and placed specific requirements on electricity The Australian Energy Market tariffs experienced over recent years is starting and natural gas retailers like Origin. Agreement sets out the legislative to plateau. However, domestic gas prices are To ensure our customers were aware of and regulatory framework for increasing due to higher wholesale energy the changes, we implemented an extensive Australia’s energy markets. costs as well as international parity pricing. communication campaign via email and direct Energy retailers are regulated mail to inform them of the cost savings they under the National Energy Sustainable tariffs would receive. We also backdated all price Customer Framework. Tariffs are determined in two ways depending changes to 1 July 2014 for our customers. on the state – by regulators, known as Our additional actions ‘regulated tariffs’, or by retailers, known Helping customers in need as ‘deregulated tariffs’. We offer online tools such as Cost-of-living pressures weigh heavily on many My Account to provide customers We believe it is in the interests of all energy Australians, and rising gas and electricity prices greater visibility and control users over the long term, to set sustainable over recent years have been a contributing of their energy accounts. energy tariffs that consider long-term energy factor. We understand that there are periods procurement costs; required future investments of time when some customers may struggle Our approach in energy generation; and the need to provide to pay their energy bills. a broad range of products and services that In these situations we work closely with those We know problems can occur meet Australia’s diverse needs. We believe customers to: offer products best suited to their when customers are surprised sustainable tariffs should, ideally, be set with needs; provide relevant, timely advice; make by their bills – so we have worked reference to competition and that the best provisions and arrangements that help them hard to make sure our customers outcomes for customers will be achieved from work through short-term financial difficulties; have greater understanding deregulated markets that promote competition and avoid unmanageable levels of debt, all the of their accounts, and are and innovation in products and services. while maintaining their energy services. able to access a wide range Sustainable tariffs allow energy retailers of payment options. Many factors influence how much electricity to recover costs, make an appropriate is used by a home or business including: the Our performance return on investments, and deliver value size of the property and age; its location; to customers. the outside area temperature; whether gas Approximately 917,000, or 24% is used for cooking and heating; and whether of our total electricity and natural How we set tariffs the owners have air-conditioners, pools gas customer accounts have signed We determine our deregulated tariffs or other energy-intensive appliances. for consumer and business customers by up to e-billing, enabling them Helping customers understand these factors considering several underlying elements. to receive bills via email and pay allows them to more effectively manage their them online using direct debit, These include the costs of generating or energy use and, in turn, better manage their BPAY® or credit card. buying energy, including the costs to supply energy costs. Educating our customers about energy to homes and businesses using the effective energy management is a high priority poles-and-wires network, as well as the costs for Origin. of providing retail service to customers, which factors in our need to reconcile Raising awareness meter data and manage accounts. through energy education There are still substantial compliance Energy plays a central role in our lives. If you requirements when retailers set tariffs think about your home, almost everything without regulatory oversight, including you use from lighting and heating to cooking the need to post information to comparison or entertainment is powered by energy. sites and communicate price changes Yet most people give little thought to where to customers. energy comes from or how to manage Where tariffs are subject to regulation, their usage of it. such as electricity in Queensland and gas We do our best to raise awareness about in NSW, we model our tariffs according to energy by keeping our customers up-to-date the methodology prescribed by the regulators on the latest energy information including in those states. While electricity in New South energy-saving tips, pricing information and Wales is not yet fully deregulated, the state suggesting new products that might be suited is on a pathway to complete deregulation. to a customer’s individual needs. By making the customer’s needs our first consideration, we empower them to take control of their energy bills and make better decisions on how best to manage their consumption.

36 DELIVERING ENERGY In mid-2014, we launched a national brand Accessible via the My Account online campaign Energy Made Fresh Daily that aims customer portal, this tool allows customers to make Australians more aware of the nature greater visibility of their energy usage, of energy and how it’s delivered. The second including where and when energy is being My Account stage of the campaign was rolled out in used in their home so they can make better May 2015, and focused on the benefits energy-efficient decisions and potentially customer portal of solar power. lower their energy costs. allows customers We are also working to educate tomorrow’s While Origin Energy Manager works best greater visibility of leaders with our Energy for Schools program. in conjunction with smart meters, we have Designed for both teachers and students, this developed the technology in a way that allows their energy usage program aims to educate students on the basic Origin customers outside Victoria to use it, including where history, science and economics of the energy without requiring a smart meter to be installed. industry in Australia using both online education Our collective investment in technological and when energy resources and face-to-face interaction during innovations and proactive education has is being used in in-school visits. We visited 31 schools during provided our customers with unprecedented the 2015 financial year, and 2,512 children and transparency, understanding and awareness their home so they 90 teachers participated in our program. of the energy they use. Customer registrations can make better During the period we also introduced the for the My Account online portal have grown Origin Blog, an online hub that offers insight from 568,000 to 972,000 in the past energy-efficient into global and national energy challenges, 12 months, a 71 per cent increase primarily decisions and different energy technologies, policy issues driven by our auto-registration efforts. and more. More than half of these registered customers potentially lower Our blog is regularly updated, and allows us subsequently activated their My Account their energy costs. to share ideas, industry comments, practical service, representing about 17 per cent tips, advice and opinion pieces. of total customer accounts. My Account enhances our customers’ experience ABOVE Solutions to control energy use and costs by allowing customers to view and pay their bills My Account customer portal helps customers monitor and The introduction of smart meters has been online; check and update their account contact manage their energy use. one of the biggest developments in electricity details; view and/or change their current energy supply since electric lights were introduced over plan; view current offers; and check energy a century ago. We’ve embraced this technology consumption on their past bills. where it is most prevalent in Victoria, enabling Origin to provide greater transparency to our customers in that state by allowing them to view their energy use online with the Origin Energy Manager.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 DELIVERING ENERGY 37 Our billing and payment options Customers are identified as potential Power On To improve our customers’ interaction with participants when they alert us to the fact they Origin, our service teams remain focused are having difficulty meeting a bill payment, on helping our customers to understand bills, or who require us to call them about an overdue update account details and, when required, payment. Our call centre team are trained make special arrangements for payment. to refer callers who seem to be experiencing hardship to our Power On team. Using this We have also introduced new, innovative proactive early intervention approach to assist payment options that encourage our customers our customers before the problem becomes to pay their bills on time; and provided incentives too large, we are able to identify customers that encourage them to pay online and set who have a higher likelihood of falling into up automatic bill payments, using direct arrears in bill payments, and assist them debit and other methods. in managing their energy costs before At the end of the 2015 financial year, we had it becomes a larger problem. approximately 917,000 electricity and natural Customers who enter into the program must gas customer accounts signed up for e-billing, work with us to reduce their energy usage representing around 24 per cent of our total to sustainable levels, repay their debt, and electricity and natural gas customer accounts. adhere to the terms we agree upon together. Our online billing continues to increase in If they refuse to engage with us or repeatedly functionality, allowing customers to receive break the terms of the agreement, they lose and pay bills in a variety of ways including the right to participate in the program. direct debit, credit card, phone, BPAY®, over the internet and via email. In recent years, the number of disconnections resulting from non-payment has risen – but We also introduced the ability for customers to so too has the number of customers actively set up SMS notifications and payment reminders, utilising Power On’s payment support. Customers in a way that suits their needs. At the end of the that remain on the Power On program and 2015 financial year, approximately 683,000 are committed to meeting the program customer accounts had taken up direct debit, requirements are protected from energy representing around 18 per cent of our total supply disconnection. Origin is ranked as electricity and natural gas customer accounts. This growth in direct debit usage mirrors the At the end of the 2015 financial year, the current industry take-up of our Pay On Time discounts 23,453 customers were being financially to customers. supported through Power On, up from leader in handling 20,670 the prior year. customers’ financial Support for customers During this period, 6,106 of our Power On hardship issues(1). experiencing hardship customers successfully paid off their debts Energy affordability is a growing concern and moved out of the program. We remain for more Australians as price increases far in contact with these customers as part of our outstrip CPI salary increases. We recognise ongoing customer care program to help them people sometimes face challenges that can manage their ongoing energy costs and provide leave them in financial difficulty and we’re early intervention calls if they fail to meet their required to design, implement and maintain payment thresholds. a customer hardship program to address this. Our Power On program was recognised in Origin is also working with community groups a recent survey undertaken by the Financial to build awareness of how we can assist our and Consumer Rights Council, which saw most vulnerable customers manage their energy Victorian financial counsellors rank the policies costs. Many years of successful operation has and practices of energy retailers for customers. proven that our hardship program – Power On Overall, financial counsellors ranked Origin – meets these requirements by assisting our as the current industry leader in handling customers through difficult times and helping customers’ financial hardship issues(1). them to get back in control of their energy If needed, we arrange free home energy use and bills. audits to help our customers identify how they Origin’s Power On program is approved by the can reduce their energy usage to avoid financial Australian Energy Regulator and offers energy issues. We conducted 441 of these audits (1) Financial and Consumer Rights Council, efficiency information, referrals to financial during the 2015 financial year, and provided Rank the Energy Retailer, August 2014. 111 financial counsellors contributed counselling services, flexible payment options more than $45,000 worth of energy efficiency to the survey, representing 62 per cent and general advice. It also informs customers upgrades that helped our customers conserve of the sector. of relevant government concessions and energy, reduce their bills and reduce their (2) Independent Pricing & Regulatory Tribunal, Review of regulated retail prices grants available in their state, ensuring they greenhouse emissions. and changes for electricity 2013 to 2016. are receiving all possible financial assistance.

BREAKDOWN OF COSTS IN A TYPICAL NSW ELECTRICITY BILL(2)

Generators Retail Services The cost of Managing your accounts, generating electricity billing and customer services

24% 55% 15% 6%

Networks Government green schemes Paying for the maintenance, upgrading The national renewable energy target and operation of the poles and wires and other state based schemes

38 DELIVERING ENERGY WE HELP MAKE WARM BATHS FOR THOUSANDS OF DOGS Our teams ensure hot water is ready to go whenever it’s needed.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 39 MANAGING Origin has diverse operations spanning across OUR BUSINESS the energy supply chain, from gas exploration and production, to power generation and energy retailing. We employ a team of around 6,900 people who work hard to keep our business running smoothly and safely. A business of this size, scale and complexity requires considered management to ensure its ongoing success.

In this section we detail our performance Towards a generative safety culture for the 2015 financial year across the areas Much of our focus in the 2015 financial year of health and safety, government policy, climate has been on improving our safety culture. change and emissions, as well as our financial A series of cultural climate surveys conducted performance, corporate governance and our across our business highlighted the opportunity work towards improving diversity and inclusion. for us to move towards a more generative culture, where people are recognised as the key to success, where failure is embraced as an opportunity to learn and improve, and safety performance is regarded as a core ingredient SAFETY of good business. SAFETY AT A GLANCE Why safety is important During the year, we updated our HSE Policy to better articulate our aspiration for a safe OUR PURPOSE At Origin, safety is our first priority. It is important for our business and we believe workplace, and to highlight those actions and We aspire to conduct our business that every employee and contractor should behaviours that we believe reflect a generative in a way that causes no harm expect to return home safe at the end of culture. Our new policy places greater emphasis to the health and safety of our every day. We continually strive to improve on being mindful of risk, on personal ownership people, or our facilities, and our performance in the areas of personal and and accountability, and on continuously learning. has no unforeseen impacts process safety, as we work towards our goal It is well known that operational excellence on the environment. to create an injury free workplace for our and safety performance are closely linked. Laws and regulations employees and contractors. For this reason, the Board determined that it is We work in an industry which, by its very important that all our people have an incentive Our activities are governed by nature, gives rise to a range of health and to focus on safety. Each year the Board is able relevant federal and state safety safety risks. Some of the activities regularly to recognise the efforts of employees via the laws and regulations, and industry carried out in our business range from Employee Share Plan, which awards $1,000 specific codes. the operation of onshore gas drilling rigs, of Origin shares to all eligible employees, construction, to travelling to offshore gas subject to the achievement of company-wide Our additional actions production platforms, through to managing targets relating to safety. For the reporting large gas processing facilities and power stations period, the award of the Share Plan is linked Our Health and Safety Policy and driving on roads. Process safety is a critical to the achievement of our closed HSE actions outlines how we think about, part of ensuring our facilities and assets are target, which encourages employees to identify plan and manage health, safety maintained to safe standards, and we are and complete actions that will make the and environmental impacts and committed to aligning our practices with workplace safer. initiatives across our business. industry standards. Managing personal safety Our approach Safety in our workplace is governed by relevant Origin’s primary measure of safety performance federal and state legislation and regulations is the Total Recordable Injury Frequency Rate(1) We are building a culture related to safety, and the majority of the areas (TRIFR), which measures our company-wide that encourages transparency we operate in are highly regulated. For example, work-related injuries. For the 2015 financial and ownership, rewards safe as Upstream operator of the Australia Pacific year, we recorded a TRIFR of 3.8, which was behaviours and strives for LNG project our work program is primarily a 24 per cent improvement on the prior continual improvement. regulated by Queensland’s Petroleum & Gas period, and ahead of our target of 4.5 for (Production & Safety) Act 2004 and Work Our performance Health and Safety Act 2011. At a minimum, the financial year. When we reflect on this achievement, however, TRIFR of 3.8, a 24% improvement we meet these requirements, but we also it is with great sadness at the loss of one of on the prior year and our lowest strive to do better where we can and, where our team members working on the Australia ever. 80,456 safety observations appropriate, to apply higher standards that Pacific LNG project, who was fatally injured recorded and closed out. Sadly, further safeguard our workforce. in September 2014 at Reedy Creek. we lost one of our colleagues Origin’s Health, Safety and Environment working on the Australia Pacific (HSE) Policy can be found on our website LNG project. and explains how we think about, plan and manage health, safety and environmental impacts and initiatives across our business. Our directives are derived from the commitments made within this HSE Policy, and they mandate the minimum requirements, responsibilities, and business rules that are needed to successfully implement this Policy (1) TRIFR is calculated as a 12-month and the HSE management system. rolling average.

40 MANAGING OUR BUSINESS Origin continues to prioritise safety performance and during the period there has been increased management focus on both safety processes and communication. Some of the initiatives included: —— increased visibility of our front line and senior leadership team members in the field; —— emphasis on more engaging toolbox talks(1) and job pre-starts; —— continued promotion of our Observations Program, which enables employees to have safety conversations about safe and unsafe behaviours and to identify and address hazards in the workplace before they become incidents; —— introduction of our HSE action program which encourages employees to identify and complete actions that will make the workplace safer; —— development of risk reduction strategies and use of simplified risk assessment tools; and —— additional training to up-skill our front line employees. In addition, Short Term Incentives for our senior executives are determined by reference to Group Performance as well as Business Unit Closed HSE actions ABOVE and personal operational measures. Business Our focus has been on improving Origin’s Unit measures include safety outcomes, HSE actions are those tasks we identify safety culture. engagement scores, project milestones and through activities such as observations, production metrics or customer satisfaction incident reviews, audits and risk assessments, and profitability. that when completed, can help to reduce a risk, TOTAL RECORDABLE INJURY Another metric used to track and improve or prevent an incident. FREQUENCY RATE (TRIFR) our performance is Lost Time Injury Frequency Closing out these tasks, and doing so within the Rate(2) (LTIFR). This measure identifies the time we committed to do them, demonstrates 10 severity of injuries which impact upon our the level of urgency and priority we are placing 8.0 people and involves measuring the number on improving HSE for ourselves and others. 8 of injuries resulting in an employee missing In July 2014, we introduced a new measure at least one full shift or work day. around closing HSE actions. Our target is 6 LTIFR is a subset of TRIFR. During the 2015 to complete at least 80 per cent of the actions 4 financial year, there were 31 lost time cases we identify and record in our HSE tracking 3.8 and a total of 80(3) days of work lost. Our LTIFR system by their due date. Achievement of this remained stable this year at 1.0. This can be target is linked to the Employee Share Plan. 2 attributed to a combination of increased Our closure rate for the 2015 financial year was management visibility across field locations, 0 at 85.3 per cent, and as a result the Board has FY2012 FY2013 FY2014 FY2015 coupled with supervisor leadership programs approved an award to eligible employees under and a decrease in project activity from the the Share Plan. All eligible full-time employees Australia Pacific LNG project. will be allocated $1,000 of Origin shares.

Observation performance Significant Incident Frequency Rate Observations are a key tool we use Going forward, we will introduce a new target to recognise safe and unsafe behaviours, to our safety measurement. identify and address hazards in the workplace A ‘Significant Incident’ is one that has the and help prevent unsafe ones. Taking personal potential to result in a critical or catastrophic ownership and accountability, and being consequence. We have been measuring our mindful of risk are key to improving the safety Significant Incident Frequency Rate (SIFR) of our workplace. We know that the right in addition to TRIFR for more than five years, conversations are crucial to reinforcing positive and in the 2016 financial year we will set an safety outcomes, so we encourage employees organisation-wide target for SIFR to help to include a personal conversation with their us focus on those areas with the most colleagues about the safe or unsafe behaviour significant consequential risk – including they observe. process safety, aviation, land transport, All employees are encouraged to make environment and security. and record observations in an online database, regardless of their level or work area. Managers have the additional responsibility of coaching their teams in how to make quality observations and for sharing lessons learned. We formally introduced this Observation Program across Origin in July 2011. For the (1) Toolbox talks are onsite small group discussions between managers and 2015 financial year, 81,703 observations had their team about important business been raised and 80,456 closed, against a target issues or topics. of 45,000. (2) LTIFR is calculated as a 12-month rolling average. (3) The number of days lost FY2014 includes employees and contractors. Available data for FY2015 includes employees only.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 41 Managing process safety Process safety involves making sure our facilities are well designed, safely operated and properly maintained. When we manage process safety risk we are required to follow a range of national and state laws and regulations, which requires a positive demonstration of safety due diligence. We have process safety related requirements contained in our HSE Management System and associated Directives, which we benchmark against industry guidance from the UK Energy Institute and the International Association of Oil and Gas Producers (IOGP). Our process safety management practice is aligned with recognised industry standards. This involves understanding our hazards, identifying process safety critical controls, and implementing integrity management and performance monitoring to reduce BECOMING A NSW STATE the risk of process safety events ‘so far EMERGENCY SERVICES CADET as is reasonably practical’. Process safety management extends across the design and construction of our assets, the safe operation of our facilities and the Origin recognises the critical This is why in December 2014 Origin maintenance of plant, equipment and protection role of the SES in communities, was proud to announce a new partnership system integrity. We also seek to ensure that which is why we have supported with the NSW SES, aiming to help the our people are trained and competent, that the organisation to help recognise, organisation to recognise, reward, and major changes to plant, people and processes recruit volunteers – the lifeblood of the reward and recruit volunteers. are properly assessed in line with their risk organisation. Through our work with the profile, and we incorporate learnings from For many Australians, the orange State NSW SES, we supported the NSW SES past issues to prevent future incidents. Cadet Program, which helps enlist the next Emergency Services uniform is an iconic Our process safety performance is tracked piece of clothing, conjuring images generation of volunteers. The program aims to provide cadets with skills to service their using leading and lagging indicators. of community volunteers and heroes Each Business Unit reports process safety in times of need. local community, knowledge of the NSW SES service and other emergency service performance internally, on at least a quarterly At Origin, we recognise the critical role agencies, and encourages positive basis. Enterprise-wide process safety the SES plays in our community, particularly personal achievements. performance is reported to the Operational when disaster strikes. During 2014 alone, Risk Committee and process safety risks are NSW SES volunteers attended over 16,000 The cadet program is tailored for students regularly reviewed by Origin’s Risk Committee. from Year Nine. The five-day short course storm and flood-related jobs, responded We are currently part way through a three-year to 604 road crashes and helped the NSW facilitated by SES volunteers is based on best practice emergency services Australia-wide process safety improvement project, initiated Rural Fire Service with over 800 bushfire in 2014 by our Operational Risk Committee. support tasks. and sees students visit their local SES unit as well as other emergency services. The project aims to streamline and consolidate Throughout 2014, approximately 10,000 They also gain hands-on experience by process safety management practices across volunteers of all ages, professions and participating directly in activities aimed at Origin, and develop common key performance backgrounds served in the NSW SES. educating them in safety, communication indicators to facilitate governance of process Undertaking both operational and and working in a team. safety management performance. administrative roles, these volunteers We actively participate in the APPEA’s annual supported over 200 units located Time spent in the program will count towards service as a full member of the Stand Together for Safety event, which is throughout the state – a massive dedicated to promoting the highest standards effort by any standard. SES, and upon successful completion of the program, participants will be given the of safety for operations in Australia. In addition, opportunity to join their local SES unit. Origin annually reports process safety management activities and incident performance across our Integrated Gas ABOVE Students from the State Emergency business to the IOGP. Services Cadet Program practicing their rescue skills. Our performance In the 2015 financial year, we recorded a total of eight process safety events(1). These comprised three tier one and five tier two loss of primary containment incidents, as defined by IOGP(2), which were detected and controlled to prevent impact to the environment, community and our assets. Two of these incidents resulted in a recordable injury(3). We also record, investigate (1) With the potential for a serious and trend data for lower consequence process consequence or above, as defined by the safety incidents, to ensure the integrity of our Origin risk matrix. (2) IOGP Report No. 456 defines tier one process safety critical controls. process safety events as losses of primary containment with the greatest consequences and provides a set of consequence-based criteria for this, as well as a set of threshold quantities for various materials. A tier two process safety event is a loss of primary containment with lesser consequences (IOGP 2011:12, www.ogp.org.uk/ pubs/456.pdf). (3) Included in FY2015 TRIFR.

42 MANAGING OUR BUSINESS This shift is partly the result of the Australian NATIONAL ELECTRICITY MARKET CLIMATE CHANGE AND OUR BUSINESS Government’s RET, which is discussed in the GENERATION CAPACITY Policy Section on page 50. BY FUEL TYPE FY2015 (%)(5) Origin acknowledges that climate change Origin operates one of Australia’s largest is a significant societal challenge and unequivocally power generation portfolios with a capacity supports measures to progressively reduce of approximately 6,000 MW, representing 3 global carbon emissions. We also acknowledge 7 around 13 per cent(2) of capacity in the the ultimate goal of the United Nations for National Electricity Market (NEM). a new global agreement that provides a pathway 17 to achieving 2 degree Celsius warming or less, Origin is also one of the largest owners and 39 in order to have a realistic chance of avoiding developers of natural gas-fired power stations the most extreme impacts of climate change. in Australia(3). We own and operate seven natural gas-fired power stations across Victoria, South We believe climate change requires a global Australia, New South Wales and Queensland response. Energy is a central part of the 20 with a total capacity of 2,604 MW. Natural gas challenge, accounting for two thirds of global produces less carbon emissions per MWh carbon production(1) and creating known 14 than coal when burned to create electricity environmental impacts. Yet energy is critical and highly efficient gas-fired power stations, for continued economic and social development such as Origin’s Darling Downs Power Station, Black coal Hydro and is integral to helping bring people out produce less than half of the emissions of poverty in developing economies. Brown coal Wind of a typical coal-fired power station. This creates challenges, risks and Gas Other At 2,880 MW, Origin’s Eraring Power Station opportunities for energy producers is Australia’s largest power station. The black and suppliers, including Origin. coal-fired Eraring is critical to providing secure The following section discusses the global and reliable energy supply to the people of NSW, ORIGIN INTERNAL GENERATION context of climate change and energy, how our and generated approximately 20 per cent of the CAPACITY BY FUEL TYPE FY2015 (%) strategy helps us to manage risks and create electricity that customers in the state drew opportunities within this context, as well as from the grid in the 2015 financial year. Eraring a comprehensive view of 2015 emissions is one of the more efficient and low emissions performance and future emissions trends. intensity coal-fired power stations in Australia, 1 4 as shown in the chart below, which ranks the Our framework for station against the nation’s large (greater than managing climate change 400 MW) power stations. Origin does not have Origin’s strategy is to connect resources any investments in the more carbon intensive 50 to markets, which we pursue via our three brown coal-fired power stations. 45 businesses: energy markets, natural gas and The relative shares of gas and black coal LNG and renewable energy. Below we discuss in our internal generation fleet are shown each of these businesses in the context in the diagram at right, alongside a comparison of climate change. with the relative contribution of fuel sources in the NEM. Energy Markets These pie charts show that Origin’s energy Historically, fossil fuels have been responsible for Black coal Wind mix is made up primarily of black coal and the majority of Australia’s electricity production, natural gas, while the NEM is dominated Gas Other delivering cheap and reliable energy. Over by brown coal and black coal. the past decade, Australia’s electricity mix has become slightly less carbon-intensive, with gas-fired and renewable generation starting to make up a larger portion of the portfolio.

2015 NATIONAL ELECTRICITY MARKET COAL-FIRED EMISSIONS INTENSITIES(4) (TONNES CO2/MWh SENT-OUT)

1.8

1.6

1.4

1.2

1.0

0.8

0.6 (1) International Energy Agency, Energy and Climate Change: World 0.4 Energy Outlook Special Report 2015. (2) Australian Energy Regulator, NEM 0.2 Generation Capacity FY2015 YTD as at 1 April 2015. (3) Origin’s generation capacity is 0 ~6,000 MW compared with the National Electricity Market’s generation capacity of 45,000 MW. Source: The Australian Energy Regulator’s 810 MW 810 744 MW 744 530 MW 530 852 MW 852 LIDDELL 450 MW 700 MW TARONG ERARING MT PIPER 2,210 MW Generation Capacity and Peak Demand. 1,000 MW

1,320 MW 2,640 MW 1,460 MW 1,680 MW CALLIDE B 1,480 MW 2,880 MW 1,600 MW 1,400 MW 1,400 MW CALLIDE C 2,000 MW

YALLOURN STANWELL NORTHERN LOY YANGLOY B LOY YANGLOY A

BAYSWATER (4) As at 20 July 2015. Power stations GLADSTONE MILLMERRAN HAZELWOOD KOGAN CREEK

VALES POINT B with a total nominal capacity of less

TARONG NORTH TARONG than 400 MW have not been included. Brown coal-fired power station Black coal-fired power station Source: AEMO Carbon Dioxide Equivalent Intensity Index 2015. Origin’s only black coal-fired power station, Eraring (5) www.aer.gov.au.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 43 RIGHT Origin’s Eraring Power Station is one of the more efficient and low carbon intensity coal-fired power stations in NSW.

Renewable energy also plays an important role The IEA provides guidance on a number of in our electricity portfolio. Including the 30 MW global warming scenarios and the appropriate Cullerin Range Wind Farm in NSW, Origin has energy mix to limit global warming to 2 degrees One of Origin’s a portfolio of more than 700 MW of owned and Celsius. These scenarios limit the use of high contracted wind power. This is mostly secured emission fuels such as coal and increase the priorities is to grow via Power Purchase Agreements (PPAs), which contribution of gas and renewables in order our capabilities are one of the key ways Origin contributes to minimise the impact of climate change. and investment in to renewable energy developments. In the IEA ‘450 Scenario’ gas continues to have There is no current requirement for new a significant role in the energy mix, with global renewable energy. investment in power generation in Australia, gas production forecast to rise by 23 per cent other than to meet the RET. This means that by 2040 compared to the base year of 2012(2). any new generation over the next five years Origin is actively participating in delivering is likely to be renewable, with Origin currently lower carbon energy solutions to Asia Pacific, considering the development of the Stockyard via our interest in Australia Pacific LNG. Once Hill Wind Farm in Victoria and utility scale solar the project’s two LNG trains are operating, in Queensland. With the subdued demand for Origin will significantly grow gas production. electricity and the ongoing growth of supply While this will increase Origin’s emissions driven by renewable energy policy, Origin in Australia, it is expected to reduce global has no active plans in place to develop coal emissions by a larger amount. or gas-fired power stations in Australia. A Worley Parsons report found that each Integrated Gas tonne of carbon emissions from LNG production in Australia reduces carbon emissions in China Origin is one of the largest producers of natural by 4.3 tonnes when this gas is used in place gas on Australia’s east coast and Australia Pacific of conventional coal-fired electricity generation. LNG, in which Origin has a 37.5 per cent interest, This demonstrates one of the global benefits will shortly begin exporting LNG. available from the development of Australia’s Over time, Origin expects that its total carbon abundant natural gas resources(3). emissions related to gas will increase along with the growth of our gas business. However, we Renewable energy believe that in a global marketplace a narrow One of Origin’s priorities is to grow its capabilities focus on emissions at the point of production and investment in renewable energy. does not recognise the role companies like Origin will play in providing lower carbon fuel Forecasts indicate that in decades to come choices to markets around the world. societies demand for renewable energy sources will outstrip the demand for non-renewable At Origin, we understand that whether we energy sources(4). Origin is looking for generate and deliver electricity to customers, opportunities to harness renewable energy as with our domestic power generation from world-class sources. Providing these business, or deliver energy via LNG to wholesale fuels into markets where the demand and customers in Asia, climate change implications policy settings support renewable energy are best considered with life-cycle carbon supply gives us strategic growth options emissions in mind. Natural gas has the potential in a fast-developing segment of the global to supply energy to the world at lower energy portfolio. carbon-intensive rates than traditional coal. This is a clear priority for Origin as we consider (1) International Energy Agency, This is particularly important given the scale the development of energy solutions for the World Energy Outlook 2014. of the challenge because, as the IEA estimates, future. The direction of our strategic thinking (2) International Energy Agency, Energy without further measures (the ‘Current Policies’ and Climate Change: World Energy is discussed further in Future Energy Solutions Outlook Special Report 2015. scenario) world energy demand is estimated on page 60. (3) Worley Parsons, Greenhouse Gas to increase by 50 per cent between 2012 Emissions Study of Australian CSG and 2040(1). to LNG, 2011. (4) International Energy Agency, World Energy Outlook 2014.

44 MANAGING OUR BUSINESS Future trends in emission intensity Under the National Pollutant Inventory, Origin Today, Origin’s total emissions and our emissions also reports annually on polluting substances intensity are predominantly driven by our power that are emitted into the environment, including EMISSIONS generation portfolio, and in particular, the Eraring oxides of nitrogen (NOx) and oxides of sulphur AT A GLANCE Power Station. Our gas business contributes (SOx). In line with regulatory requirements, our emissions are reported to the relevant a relatively small proportion of total emissions. OUR PURPOSE state environment regulators by 30 September When Australia Pacific LNG begins exporting each year. Closely measure and report the LNG to Asian markets later in 2015, Origin’s emissions associated with our total gas production will increase to meet the The majority of our current GHG emissions are power generation activities. demand of the two train LNG plant. In line with direct emissions (Scope 1), resulting from our this growth in gas production, Origin’s total role as electricity generator and to some extent Laws and regulations Scope 1 and Scope 2 carbon emissions are as a producer of oil and gas. Indirect emissions expected to increase. from purchased energy (Scope 2) and other Emission reporting is regulated indirect emissions account for a small portion at a national level, under the Notwithstanding this increase, Origin believes of our total GHG emissions. Our reporting also National Greenhouse and Energy we will be making an important contribution to includes emissions data from our New Zealand Reporting Act 2007. the global challenge of addressing climate change oil and gas assets. by facilitating the substitution of higher carbon Our additional actions intensive fuels for lower carbon intensive In the 2015 financial year, Origin’s Scope 1 and fuels. Natural gas can be used to produce Scope 2 GHG emissions on an operational basis Each year we voluntarily report equal amounts of electricity as coal-fired totalled 17,149 kilotonnes of carbon dioxide our emissions to the Carbon generation, while resulting in around half equivalent (kt CO2-e). This is an increase of Disclosure Project and have of the carbon emissions(1). 14 per cent compared with the previous year been doing so since 2007. of 15,064 kt CO2-e. On an equity basis, Origin’s In essence, we will be producing more energy Scope 1 and Scope 2 GHG emissions totalled to help meet demand, yet doing so in a way that Our approach 18,339 kt CO2-e, up 12 per cent on the helps reduce the emissions intensity of global previous year. We have built a portfolio of low energy production. carbon power generation assets Energy Markets emissions including natural gas and wind. Emissions performance 2015 (2) Our Energy Markets business accounts for Reporting our emissions 92 per cent of Origin’s Scope 1 GHG emissions. Our performance We are committed to complying with relevant The majority, or 80 per cent, of Scope 1 Emissions intensity of 0.85 emissions reporting frameworks. In Australia, (4) emissions for Energy Markets relate to Eraring t CO2-e/MWh is below the NEM Greenhouse Gas (GHG) emissions reporting (5) Power Station. Eraring’s Scope 1 emissions average of 0.91 t CO2-e/MWh . is tightly regulated and aligned to the increased by 17 per cent to 12,410 kt CO2-e Intergovernmental Panel on Climate on an operational control basis for the 2015 Change (IPCC) reporting framework. financial year. This is primarily due to higher We follow the Australian Government’s generation output. National Greenhouse Emissions Reporting Act The remaining emissions relate to Origin’s other 2007 (Cth) (NGER Act) to calculate and report power generation assets, and the LPG and GHG emissions produced directly and indirectly Cogent businesses, which together produced by our Australia based activities and operations. Scope 1 emissions of 3,008 kt CO2-e for the In New Zealand, we report our emissions under 2015 financial year. the Climate Change Response Act 2002. For the 2015 financial year, the emissions Since 2007 we have also undertaken voluntary intensity from our electrical energy production reporting of our GHG emissions to the Carbon (power generation) was 0.77 t CO2-e/MWh for Disclosure Project (CDP). Our responses to Scope 1 emissions. the CDP climate change survey have also been publicly available since 2008 and can be accessed The Australian Energy Market Operator via CDP’s website www.cdp.net. (AEMO) calculates the average emissions intensity of the NEM using estimated Scope 1 By 31 October each year, we report our audited and Scope 3(3) emissions. The emissions intensity GHG emissions to the Commonwealth regulator of Origin’s generation portfolio continued to under the NGER Act. compare favourably this year at 0.85 t CO2-e/ MWh(4), approximately 6 per cent below the (5) NEM average of 0.91 t CO2-e/MWh .

Origin GHG emissions performance 2015(6) (1) http://www.appea.com.au/ Operational control basis Equity basis oil-gas-explained/benefits/ cleaner-energy/. (2) Data is reported as an 11 month Scope 1 (kt CO2-e) 16,752 18,106 actual (July-May) + one month estimate (June). Scope 2 (kt CO2-e) 397 233 (3) Scope 3 emissions are all indirect emissions (not included in Scope 2) that Scope 1 emissions intensity occur in the value chain of the reporting company, including both Upstream and of electrical energy production (t CO2-e/MWh) 0.77 0.65 Downstream emissions. Scope 1 and 2 emissions intensity (4) Calculated using the AEMO approach, of oil and gas production (t CO -e/TJ) 8.0 11.2 that is, intensity of Scope 1 + Scope 3 2 (supply chain) emissions. Scope 1 + Scope 3 emissions intensity (t CO2-e/MWh) 0.85 – (5) NEM average intensity calculated using the load weighted average of NEM average (t CO2-e/MWh) 0.91 – the FY2015 carbon dioxide equivalent intensity index published by AEMO as at 10 July 2015. (6) FY2015 result includes Upstream Oil and Gas (NZ).

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 45 Emissions data

(1) GHG emissions intensity (t CO2-e/MWh and t CO2-e/TJ)

FY2011 FY2012 FY2013 FY2014 FY2015

Operational control basis

Generation (t CO2-e/MWh) 0.44 0.75 0.74 0.77 0.77 Upstream Oil and Gas and LNG (2) (t CO2-e/TJ) 6.0 5.7 7.0 6.84 8.0

Equity basis

Generation (t CO2-e/MWh) 0.33 0.33 0.39 0.62 0.65 Upstream Oil and Gas and LNG (t CO2-e/TJ) 8.0 7.8 8.4 7.75 11.2

Direct GHG emissions (Scope 1) (kt CO2-e)

FY2011 FY2012 FY2013 FY2014 FY2015 Operational control basis Origin believes Energy Markets, of which: 1,662 1,676 12,411 13,387 15,418 we will be making —— Eraring(3) 3,909 10,137 9,826 10,583 12,410 an important —— Generation (exc. Eraring) 1,606 1,618 2,528 2,749 2,952 contribution to the —— LPG 48 48 45 40 41 —— Cogent 8 10 12 15 15 global challenge LNG – – 657 892 742 of addressing Upstream Oil and Gas (4) 1,189 1,050 592 652 590 climate change Others 5 3 3 3 3 by facilitating the Total Scope 1 – substitution of higher operational control basis 6,765 12,866 13,663 14,934 16,753 carbon intensive fuels Equity basis Energy Markets, of which: 3,277 3,598 4,741 15,182 16,089(5) for lower carbon —— Eraring – – – 10,583 12,410 intensive fuels. —— Generation (exc. Eraring) 3,221 3,540 4,684 4,544 2,952 —— JV Generation 671 —— LPG 48 48 45 40 41 —— Cogent 8 10 12 15 15 Contact Energy (6) 956 LNG – – 295 390 274 Upstream Oil and Gas (Aus) 1,076 1,012 741 708 698 Upstream Oil and Gas (NZ) 87 Others 5 3 3 3 3

Total Scope 1 – equity basis 4,358 4,613 5,780 16,283 18,107

(1) Note from FY2015 the Upstream Oil and Gas and LNG intensities are a combined Scope 1 and Indirect GHG emissions (Scope 2) (kt CO2-e) Scope 2 intensity. (2) This data point combines Scope 1 and Scope 2 emissions intensity, FY2011 FY2012 FY2013 FY2014 FY2015 to include electricity emissions from the electrification of LNG assets. Operational control basis (3) Origin assumed operational control (7) of Eraring Power Station on 1 August Energy producing sites 50 42 184 113 386 2013. Prior to this Origin owned Non-energy producing sites 21 19 18 17 11 the output of Eraring Power station from March 2011 under the previous GenTrader Arrangement with the Total Scope 2 – NSW Government. Scope 1 and operational control basis 71 61 202 130 397 Scope 2 GHG Emissions for FY2011 and FY2012 are included in these emissions calculations. In FY2013, Equity basis the emissions for these assets Energy producing sites 22 28 56 99 223(8) were transferred under a Financial Control Liability Transfer Certificate Non-energy producing sites 21 19 18 17 11 to an Origin owned entity and are included to align with our obligations Total Scope 2 – equity basis 43 47 74 116 234 under the Clean Energy Act 2011. (4) Includes Upstream Oil and Gas New Zealand. (5) Not including Contact Energy. (6) Included for FY2015 however after the close of the period, Origin has divested its entire interest in Contact Energy.

(7) Comprised of Generation (112 kt CO2-e), Upstream Oil and Gas (33 kt CO2-e) and LNG (241 kt CO2-e).

(8) Comprised of Generation (112 kt CO2-e), LNG (89 kt CO2-e) and Upstream Oil and Gas (22 kt CO2-e).

46 MANAGING OUR BUSINESS Integrated Gas emissions Fugitive emissions from gas operations Together, our LNG and exploration and There has been some uncertainty around the production activities account for 8.0 per cent amount of GHG emissions from CSG extraction of our direct GHG emissions. and processing in Australia, mainly driven by Natural gas can be Emissions were relatively steady for Origin research associated with the United States used to produce operated facilities, except for Australia Pacific shale gas industry. Fugitive emissions are the equal amounts of LNG. GHG emissions from this project remained emissions and leaks from extraction and at levels higher than what we would expect over processing infrastructure that might electricity as coal- the long term, as the Project’s upstream assets accumulate in our atmosphere. fired generation, progress through the peak construction and In the financial year 2015, Origin’s fugitive commissioning phase. emissions from oil and gas operations were while resulting in (1) In FY2015, Scope 1 and Scope 2 emissions in 772 kt CO2-e . This includes emissions of methane and carbon dioxide in natural gas around half of the our gas business grew from 1,582 kt CO2-e to that is flared or vented, including leaks. Australia (3) 1,606 kt CO2-e, reflecting expanded production carbon emissions . and delivery of ramp gas in the lead up to exports Pacific LNG is currently experiencing higher from Train 1 of Australia Pacific LNG. This flaring rates that are expected to decrease once commissioning is complete. For each new gas includes methane and carbon dioxide from flaring ABOVE and venting operations. Flaring rates, which are field there is a period when gas production Senior Plant Technician, Keith Part typically higher during production ramp-up prior ramps up prior to the gas plant being at Origin’s 550 MW Mortlake gas-fired Power Station in Victoria. to commissioning of gas plants, are expected commissioned, resulting in higher flaring to reduce once commissioning is complete. rates. This is a short-term requirement and gas flaring will be managed to a level Scope 1 emissions for the Integrated Gas required for safe and reliable production. business unit fell by 14 per cent due to the improvements in the commissioning process Origin, as the Upstream operator of Australia of the new gas plants. Pacific LNG, jointly sponsored an Australian CSG fugitive emissions study undertaken by Scope 2 emissions from our energy producing the CSIRO(2). As part of this study, CSIRO sites totalled 274 kt CO2-e, a 625 per cent surveyed 43 wells in New South Wales and increase on the prior comparable period. Queensland – operated by a range of CSG This increase is largely attributed to the companies including Origin. electrification of LNG assets, and the growth in our Integrated Gas business, which saw an The study confirmed that the measured increase in electricity use to support activities emissions are consistent with the current for new gas plants and water treatment emission estimates for general equipment leaks facilities in our LNG business. and confirmed that equipment leaks comprise only a very small proportion of GHG emissions The emissions intensity from our Upstream Oil from CSG production. The results validate (1) Reported in Scope 1 direct emissions for LNG and Upstream Oil and Gas. and Gas and LNG activities was 8.0 t CO2-e/TJ that our current approach to estimating minor for Scope 1 and Scope 2. Upon completion of (2) CSIRO, Field Measurements of Fugitive emissions sources around wells is appropriate Emissions from Equipment and Well flaring associated with commissioning of Australia and that the uncertainty of the overall Casings in Australian Coal Seam Gas Production Facilities, June 2014. Pacific LNG, it is anticipated that emissions emissions from CSG production and intensity will reduce once the flaring associated (3) http://www.appea.com.au/ processing is relatively low. oil-gas-explained/benefits/ with commissioning is completed. cleaner-energy/.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 47 Methane emissions from gas basins Other air emissions(2) Methane emissions from gas basins, sometimes As part of the Australian National Pollutant referred to as seeps, are a naturally occurring Inventory (NPI), Origin’s larger operating sites phenomenon historically used by gas explorers track and report emissions of NOx, SOx and to identify potential resources. total volatile organic compounds (TVOC). There have been questions raised about These primarily arise from the combustion whether these emissions from land, typically of fuels such as natural gas, kerosene, diesel from water bores and old exploration bores, and coal. The majority of NOx, SOx and TVOC might increase as a result of gas developments emissions and particulate emissions for Origin’s in the Surat Basin. We are collaborating with operated Australian sites result from electricity and supporting public research undertaken generation at our Eraring Power Station. by GISERA to help scientists and policymakers During the 2015 financial year emissions better answer those questions. of NOx from Origin’s operated Australian A project began in 2013 to focus on methane sites totalled 25,728 tonnes. SOx emissions detection and measurement methodologies. from Origin’s operated Australian sites were These methodologies and technologies 29,267 tonnes. TVOC emissions from Origin’s included mobile surveys using vehicles fitted Australian operations remained steady and with detection equipment, remote sensing in line with production at 1,711 tonnes. techniques using aerial surveys and historic For our Energy Markets sites the majority satellite data; and assessment of ‘top-down’ of NOx, SOx and TVOC emissions and atmospheric background monitoring of particulate emissions for our operated methane emissions using fixed location Australian sites resulted from electricity monitoring stations. generation at Eraring Power Station. Emissions The first of these monitoring stations is now of NOx, SOx and particulates from Eraring established and operating at an Origin-owned stacks are managed through low NOx burners, property South West of Chinchilla. A second boiler tuning, fabric filter maintenance and Growth in global site to the North East of Chinchilla has ensuring the use of quality coal and fuel oil. energy demand been identified. In our LNG business, both NOx and SOx Results from the GISERA methodologies emissions remained at higher than expected is a critical driver and technology trials will guide deployment long term levels, as the Australia Pacific LNG of economic of suitable atmospheric monitoring and other upstream assets progressed through the peak systems, to conduct long term monitoring construction and commissioning phase. development and of emissions at sites in the Surat Basin. Particulates discharged from stacks and dust Origin believes this We are continuing our investigations from other operations on site is a community into emissions occurring at four locations concern at our Eraring Power station. can occur in tandem along a five-kilometre stretch of the In the 2015 financial year, Eraring Power with the objective Condamine River. Station emitted 829 tonnes of PM10, of reducing carbon Following recommendations arising from the an increase on the prior year emissions Norwest Technical Report(1), a detailed scientific of 440 tonnes. PM10 refers to particulates emissions. investigation into natural gas emissions in the that are 10 micrometers or smaller in diameter Condamine River, we are implementing a long and are typically associated with combustion term ongoing monitoring program. sources, while dust refers to the larger diameter particles which are generally associated with During the 2015 financial year, this work nuisance and amenity impacts. included: the successful installation of eight monitoring bores at four locations near the emissions; a real-time telemetry system reporting sub-surface water pressure data; installation of in-stream water quality monitoring stations; and continued soil, air and aquatic ecological health surveys. Using data from these monitoring bores and related seismic work, we are gaining a better understanding of the sub-surface beneath the emissions area. While emissions may be present because of the geology in the area, our ongoing monitoring and studies also suggest active management may be appropriate. As a result, we have started detailed planning on a range of active seeps management options, in combination with field production trials. International best practice shows there are proven methods which can successfully intercept and capture methane below the surface prior to its release into the atmosphere and we are assessing a number of options which may be suited to the geology of the Condamine River. (1) Condamine River Gas Seeps Investigations: Independent Review Norwest Corporation, These options would only be implemented with April 2014. full regulatory and environmental approval. (2) The emissions reported in this section have been determined in accordance with the Australian National Pollutant Inventory, and excludes New Zealand operated sites. FY2015 NOx, SOx and TVOC emissions have been estimated based on the FY2014 emissions and the relative change in energy consumed between FY2014 and FY2015.

48 MANAGING OUR BUSINESS Climate change SOUND AND STABLE POLICY Growth in energy demand is recognised The energy industry is highly regulated. as a critical driver of economic development. Governments play an instrumental role in Origin believes this demand can occur whilst shaping market settings through the design still meeting the objective of reducing carbon and implementation of policy. The capital emissions, by substituting high carbon intensive nature of our business, together intensity fuels with low carbon intensity with the time required to bring many of our and renewable fuels. activities to market, requires a sound and Climate change has been one of the most stable policy environment. substantial areas of policy development over Unexpected changes to policy or ineffective recent years and Origin has invested substantial policy can be detrimental to our business time in advocating for sound and stable policy and can also result in extra costs for our that will deliver against Australia’s emissions customers, large and small. To help mitigate reduction objectives. the risks associated with policy and regulation, In the 2015 financial year, the key components we regularly engage with policy makers of climate change policy debate in Australia have to contribute to the setting of commercially been long-term emissions reduction targets, viable policies. the RET and Direct Action. These policies We provide advice and support to various are discussed in detail below, and Origin’s full industry associations, and also contribute submissions to Government on these issues to broader policy debates by participating can be viewed at www.originenergy.com.au. in a variety of public review processes. Long-term carbon emissions Our policy advocacy reduction targets Central to our policy advocacy is the belief that If the world is to address climate change, energy policy should be assessed against the we believe long-term targets for emissions social imperatives of cost, reliability and reductions are required as a key area environmental sustainability. in Australia’s climate change policy. Origin encourages policy settings that will help Australia currently has bipartisan progressive decarbonisation. One of Origin’s commitment to reduce greenhouse gas business priorities is to grow its investment emissions by 5 per cent on 2000 levels (1) and capabilities in renewable energy, as well by 2020 . With the upcoming United Nations as exporting natural gas as LNG to Asia, Framework Convention on Climate Change where it can be used as a substitute for meeting in Paris in December 2015, the policy coal in power generation. focus has shifted to Australia’s emissions targets (1) Climate Change Authority, Reducing beyond 2020. A number of nations have Australia’s Greenhouse Gas Emissions – Targets and Progress Review – already made formal commitments relating Final Report, 2014. to longer-term emission reduction pledges – including the ‘big three’ emitters of China, BELOW the US and the European Union. Origin’s 30 MW Cullerin Range Wind Farm in NSW.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 49 In August 2015, the Federal Government Direct Action Plan announced that Australia will adopt a target to The Australian Government’s Direct Action reduce greenhouse gas emissions by between Plan is designed to reduce carbon emissions 26 and 28 per cent on 2005 levels by 2030. through federal government-funded incentives. The government plans to meet the 2030 target The policy comprises two main aspects: the through policies built on the Direct Action Plan. Emissions Reduction Fund (ERF) and the Origin plans to work with both sides of politics Safeguard Mechanism. to develop sound and enduring energy and carbon policies that will help Australia to meet The $2.55 billion ERF came into effect on (2) or exceed the target. 13 December 2014 . It enables industry and other businesses to sell carbon abatements back To better understand Australia’s contribution to the Australian Government. The second to the reduction in emissions and to contribute component, the Safeguard Mechanism, to a more informed debate on this policy is currently the subject of a consultation matter, Origin commissioned Deloitte Access process expected to be finalised in October Economics to produce a report on carbon. 2015 with obligations commencing from The report examined Australia’s greenhouse 1 July 2016. gas emissions, compared to the nations in the G20. The analysis examined the link between The Safeguard Mechanism is designed to carbon emissions and economic growth ensure that emission reductions achieved to help understand how effectively countries through the ERF are not offset by growth are using the carbon they produce to grow in emissions elsewhere in the economy. The their economies. Safeguard Mechanism could potentially cover two main aspects of our business – natural The report shows that Australia's performance gas production and electricity generation. as measured in carbon emissions per unit of GDP is better than the G20 average, and that Origin actively contributed to the development over time, Australia’s emissions intensity has of the policy framework, and has consistently reduced at a faster rate than this average. stated its belief that the ERF can deliver If the world is to a meaningful contribution to Australia’s We feel that simplistic measures like carbon emissions reduction efforts. address climate emissions per capita – traditionally used to change, long-term discuss Australia’s performance in this area – We have also stated that to achieve long-term do not provide a complete view of performance. emission reduction targets, a well-designed targets for emission As such, additional metrics including efficiency market mechanism for the electricity generation reductions are of converting carbon into GDP should be used sector is required. This could include a transition to provide a more comprehensive view of the from the Safeguards Mechanism to a market- required and current landscape. based system. Policies to facilitate the orderly retirement of emission intensive plants and Australia must Ultimately, the internationally agreed goal to encourage the deployment of low emissions play its role. is to limit average global temperatures rising technologies (without the need for excessive to 2 degrees Celsius or less, in order to have subsidies) should also be considered. a realistic chance of avoiding the most extreme impacts of climate change. It is hoped the Paris Energy White Paper agreement will place the world on a pathway The other major policy development during to achieve this goal and Origin supports the year was the release of the Australian Australia making a contribution to such Government’s Energy White Paper in April an agreement, consistent with other 2015. The Paper sets out the government’s developed nations. vision for the energy sector, which includes Renewable Energy Target Scheme Review(1) a desire for competitively priced and reliable energy, with an emphasis on productivity and There were some important amendments consumer choice. to the composition of the RET during the 2015 financial year, ending several years The White Paper also reiterated the of policy uncertainty. government’s support for a number of key policy reforms that are aligned with Origin’s The Large-scale Renewable Energy Target views. These include: the need for tariff (LRET), which supports wind farms and large reform and cost reflective network prices; solar projects is now legislated at 33 TWh, privatisation of state-owned energy assets; down from the previous target of 41 TWh. and the streamlining of the major projects We estimate that a 33 TWh LRET will require approval process. Ultimately, achieving these about 5,000 MW of wind farms or equivalent objectives will depend on cooperation from to be built by 2020, or around 12 large projects. state governments that play an important The Small-scale Renewable Energy Scheme role in regulating the energy industry. (SRES), which supports small-scale solar PV systems, is expected to contribute at least 12 TWh by 2020. The uncapped nature of the SRES means that this figure may end up being higher, particularly as new solar products emerge. This means that in total, targets are expected to generate about 45 TWh from renewable sources by 2020. Origin is and continues to be a long-time supporter of the RET. Origin’s options to acquit its liability under the RET, which is roughly a third of the entire liability, include the potential development of the Stockyard Hill Wind Farm in Victoria and utility scale solar in Queensland. (1) Renewable Energy (Electricity) These options are discussed in Future Energy Amendment Bill 2015. Solutions on page 60 of this report. (2) Carbon Farming Initiative Amendment Bill 2014.

50 MANAGING OUR BUSINESS Following the completion of this sale, Origin OUR FINANCIAL PERFORMANCE has $5.8 billion(1) of committed and undrawn debt facilities and cash, which is more than In the 2015 financial year, Origin delivered sufficient to fund the Company’s remaining solid operational performance with significant contributions to Australia Pacific LNG and progress across its key priorities. other business commitments. We improved returns in Energy Markets, During the year, we continued to focus on Australia Pacific LNG remains on track, our maintaining adequate liquidity and completed capabilities in renewables continue to grow further funding initiatives which extended with important progress made in solar, and Origin’s debt maturity profile and enhanced liquidity is sufficient to meet our remaining liquidity. Origin amended its syndicated loan contributions to Australia Pacific LNG and facilities to reduce the interest rate margin, other business initiatives. extend the maturity and increase the limit of For the 2015 financial year, Origin announced the facilities by $750 million to $7.4 billion. a Statutory Loss of $658 million, primarily Origin also issued €1 billion in hybrid capital reflecting the impairment of Origin’s investment securities on the Luxembourg Exchange, in Contact Energy and upstream assets, the which were swapped into $1.4 billion. non-cash impact of the recent depreciation Following a careful review of the carrying of the Australian dollar on the fair value of value of all assets, Origin has recognised financial instruments and debt, and interest a non-cash impairment charge of $705 million. expense which would otherwise be capitalised The impairment charge primarily relates if the Australia Pacific LNG project was to Contact Energy and the Company’s held by Origin rather than via an equity upstream assets. accounted investment. There is no impairment related to Australia Underlying Profit was $682 million, Pacific LNG; the economics of Origin’s a 4 per cent decrease compared to the investment in Australia Pacific LNG prior year. remain robust. Underlying EBITDA increased by $10 million to $2.15 billion, driven by an increase in Improved operational performance contribution from Energy Markets, offset We have consistently stated that the 2015 by lower contributions from Exploration & and 2016 financial years are transitional years Production, Corporate and Contact Energy. for Origin, as we complete the final stages Contact Energy, which has been presented of our investment in Australia Pacific LNG. as a discontinued operation in Origin’s Underlying EBITDA in our Energy Markets financial statements, contributed $199 million business increased 20 per cent to $1.26 billion. to Statutory Loss after the impairment of This was mainly due to a higher contribution Origin’s investment in that company, and from the natural gas segment due to increased $79 million to Underlying Profit. sales. Our ability to take advantage of attractively Our Group Operating Cash Flow after Tax priced ramp gas in the Energy Markets business was $1.58 billion, a 23 per cent decrease on as production commenced at the Queensland the prior year, primarily due to higher working LNG projects led to increased natural gas sales. capital reflecting the final carbon scheme In Australian dollars(2), Contact Energy payment, and the timing of tax instalments. Underlying EBITDA decreased $46 million The total dividend payable to shareholders to $487 million (NZ$525 million), reflecting in the 2015 financial year was 50 cents continued competition and retail price per share, in line with the prior year. discounting eroding tariff increases to recover increased distribution costs. This was partially Year in review offset by increased geothermal generation Work on Australia Pacific LNG is nearing following the commissioning of Te Mihi completion and the project remains on track power station. to commence sustained LNG production from Underlying EBITDA in our Exploration & Train 1 from the second quarter of the 2016 Production business decreased 18 per cent financial year and from Train 2 approximately to $399 million due to lower liquids production (1) As at 30 June 2015, adjusted to include six months later. net proceeds from the sale of Contact and lower liquids prices. As foreshadowed at Energy. Excludes Contact Energy and Notwithstanding the strong Energy Markets the half year, the availability of Queensland bank guarantees. performance for the year, market conditions ramp gas allowed Origin to use less gas from (2) In consolidating Contact Energy’s results, Origin used a monthly average remain challenging. In our Integrated Gas its own production, with the consequential exchange rate. For this year it is business, the significant fall in oil price, reduction in liquids production. This forgone NZ$1.08 to the Australian dollar, if sustained at current levels, will result gas and liquids production will be produced compared with NZ$1.10 to the Australian dollar in the prior year. in lower growth in cash flow and earnings in subsequent periods. (3) Origin’s cash contribution to Australia than previously expected. Underlying EBITDA in our LNG business Pacific LNG for the current year is net of $165 million of interest income It is therefore prudent that we continue to decreased 13 per cent to $72 million. (30 June 2014: $7 million) received on focus on reducing operating and capital costs, Mandatorily Redeemable Cumulative Origin’s net cash contribution to Australia Preference Shares (the mechanism by realigning debt across the group entities and Pacific LNG was $2.17 billion(3) during the which remaining funding to Australia where appropriate divest assets, in order period. As of 30 June 2015, $25 billion(4) Pacific LNG will be provided by the to increase Origin’s financial flexibility in the shareholders of Australia Pacific LNG had been spent by Australia Pacific LNG and in proportion to their equity interest). short to medium term. estimated costs to complete are not expected Interest on the Mandatorily Redeemable (5) Cumulative Preference Shares is paid Consistent with this approach, following to be materially different from budget . to shareholders twice per annum based the close of the 2015 financial year, Origin on a fixed interest rate. Group divested its 53.09 per cent interest (4) Includes an unfavourable foreign exchange translation impact of in Contact Energy and received net A$362 million relative to project cost cash proceeds of NZ$200 million and estimates announced in February 2013, approximately $1.4 billion. which were based on 31 December 2012 exchange rates and around $500 million of accrued expenses. (5) As announced in February 2013 based on December 2012 exchange rates.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 51 Looking ahead In the 2015 financial year, we distributed To further build resilience in Origin to periods $15.5 billion to our stakeholders which was of low oil prices, a number of initiatives have up 4 per cent on the prior year. A total been announced to reduce operating and of $1.3 billion was distributed to our capital capital costs. Origin, as Upstream operator providers through interest expense and for Australia Pacific LNG, has initiatives in place dividends paid to our shareholders. to reduce Australia Pacific LNG’s operating We also distribute value to employees through and capital costs by $1 billion per annum below wages and other benefits. In the 2015 financial costs experienced during the construction year, our value distribution to employees phase. Of this, approximately $650 million has increased by 6 per cent to $831 million. been achieved in the 2015 financial year with Commensurate with the importance we place the remaining $350 million of cost reduction on safety throughout the organisation, we again initiatives to be implemented by the end met our annual safety performance target. of the 2016 financial year. As a result, eligible employees were awarded In financial year 2016, Origin expects to reduce with up to $1,000 worth of Origin shares. operating costs in the Energy Markets business Royalties and tax expenses totalled $58 million by a further $65 million and capital costs by in the 2015 financial year. $50 million. This year we distributed $13 million to the Origin has also initiated a program to further communities in which we operate, as defined reduce costs across the Company by $200 million by the methodology of the London Since commencement a year on a sustainable basis by the 2017 Benchmarking Group. This expenditure of the project, financial year. represents various community investment More detail about Origin’s performance, programs, charitable donations, as well as Origin as the prospects and outlook can be found grants provided by the Origin Foundation. at originenergy.com.au. Approximately 25 per cent of the $13 million Upstream operator was awarded through the Origin Foundation. of Australia Pacific Value distribution Additional value LNG, has spent At Origin we strive to sustainably grow our business by adding value to the resources that Our operations and energy developments also $18.3 million come under our control, and to share this create economic value for the communities value with our stakeholders. through significant investment via the on community procurement of local goods and services from investment. Our operations and energy developments local suppliers. Since commencement of the create significant economic value which is Australia Pacific LNG project, Origin as Upstream represented in the form of interest and dividend operator of Australia Pacific LNG, has spent payments to our capital providers, wages to our $18.3 million on community investment. employees and contractors, taxes and royalties to state and federal governments, as well as initiatives that support the communities in which we operate. The value distribution calculation and commentary in this section is based on the income and expenses reported in the Income Statement of Origin Energy Limited.

Economic value distributed ($m)

FY2015 FY2014

Net expenses (excluding stakeholders’ payments)(1) 12,523 12,061 Depreciation and amortisation 809 732

Total operating costs 13,332 12,793

Employee wages and benefits net of taxes 831 783

Interest expense(2) 481 453 Dividends paid to shareholders 801 634

Total payments to providers of capital 1,282 1,087

Current income tax (benefit)/expense(3) (4) (20) 210 Royalties to government 23 39 Other taxes 55 50

Total government expenses 58 299

Community investments(5) 13 7

(1) Excludes capital expenditure. Total community contributions 13 7 (2) Excludes capitalised interest. (3) Income tax includes only current Economic value distributed 15,516 14,969 income tax (benefit)/expense. GST and deferred taxes are excluded. (4) Includes all subsidiaries in Australia and overseas. (5) Community investment totals $12.9 million in FY2015 and $6.7 million in FY2014. Rounded to the nearest million.

52 MANAGING OUR BUSINESS Structure the Board to add value CORPORATE GOVERNANCE Our Board of Directors brings vast Origin’s Board and management are committed experience to governing our business to the creation of shareholder value and strategy and is accountable to shareholders meeting the expectations of stakeholders for the performance of the Company. As at by practicing sound corporate governance. 30 June 2015, the Board comprised nine Directors, including seven Non-executive In accordance with the Third Edition ASX Directors, all of whom are considered Corporate Governance Principles and independent by the Board, and two Executive (1) Recommendations , Origin’s Annual Report Directors. Directors’ profiles, details of their contains a statement which summarises the skills, experience and special expertise are Company’s governance practices which were set out in the Directors’ Report. in place throughout the 2015 financial year. During the financial year Origin has complied The Board seeks to have an appropriate mix with all of the ASX Principles. of skills, experience, expertise and diversity to enable it to discharge its responsibilities The information on this page is an extract and add value to the Company. The Board values from Origin’s FY2015 Corporate Governance diversity in all respects, including gender and Statement, which was released on 20 August differences in background and life experience, 2015 and is published in our Annual Report, communication styles, interpersonal skills, which is available at www.originenergy.com.au. education, functional expertise and problem solving skills. Lay solid foundations Origin’s Board for management and oversight Five committees assist the Board in executing its duties in relation to audit, remuneration, and management The Board’s roles and responsibilities are health, safety and environment, nomination formalised in a Board Charter, which is available are committed and risk. on Origin’s website. The Charter sets out those to the creation functions that are delegated to management Act ethically and responsibly and those that are reserved for the Board. of shareholder The Company Secretary is accountable directly All Directors and employees are expected value and meeting to the Board, through the Chairman, on all to comply with the law and act with a high matters to do with the proper functioning level of integrity. Origin has a Code of Conduct the expectations of the Board. and a number of policies governing conduct in pursuit of Origin’s objectives in dealing of stakeholders Origin’s Board and management team with shareholders, employees, customers, by practising are committed to workplace diversity and communities, business partners, suppliers, to providing equality of opportunity and contractors and other stakeholders. The Code sound corporate a rewarding workplace for all employees. of Conduct is based on Origin’s Statement of governance. Our diversity performance is discussed in Purpose, Principles, Values and Commitments detail in Diversity and Inclusion on page 55. (Origin Compass), which serves as a guide The performance of all key executives, to Origin’s decision making, behaviours including the Managing Director, is reviewed and actions for its employees. annually against: The Origin Compass (page 4 of this report) —— a set of personal financial and and a summary of the Code of Conduct non-financial goals; is available on the Company’s website. —— Company goals; and —— adherence to the Company’s Compass, Integrity in corporate reporting which reflects the role that Origin’s The Audit Committee oversees the structure Purpose, Principles, Values and and management systems that are designed Commitments play in everyday to protect the integrity of Origin’s corporate decision making. reporting. The Chairman of the Audit Committee, The Remuneration Committee and the Board Mr Bruce Morgan, is an independent Director consider the performance of the Managing with significant financial expertise. All members Director and all members of the Executive of the Committee are financially literate and Management Team when deciding whether the Committee possesses sufficient accounting to award performance-related remuneration and financial expertise and knowledge of the through short-term and long-term incentives industry in which Origin operates. for the year completed and when assessing The Audit Committee reviews Origin’s fixed remuneration for future periods. half and full year financial reports and Each year, the Directors review the makes recommendations to the Board on performance of the Board, Board committees adopting financial statements. The Committee and individual directors. This year, a full review provides additional assurance to the Board was undertaken with assistance from an with regard to the quality and reliability independent external consultant, covering of financial information. individual Director performance, the Board and Committees’ activities and work program, Timely and balanced disclosure time commitments, meeting efficiency and Origin has adopted policies and procedures Board contribution to Company strategy, to ensure compliance with its continuous monitoring, compliance and governance. The disclosure obligations and accountability results of the review were discussed by the of senior management for that compliance. whole Board and initiatives to improve or Origin is committed to providing timely, enhance Board performance and effectiveness full and accurate disclosure and to keeping were considered and recommended. the market informed. Both the Continuous Disclosure Policy and the Communications with Shareholders Policy are available on the Company’s website.

(1) ASX Corporate Governance Council.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 53 Respect the rights of shareholders Recognise and manage risk Origin respects the rights of its shareholders The Board has an overarching policy and has adopted policies to facilitate the governing Origin’s approach to risk oversight effective exercise of those rights through and management and internal control systems. participation at general meetings , and the The Risk Committee overseas its policies and provision of regular information about Origin procedures in relation to risk management and its operations. Origin is committed to and internal control systems. providing a high standard of communication to its shareholders and other stakeholders. The Risk Committee reviews Origin’s risk management framework annually. Origin’s risk Shareholders are able to review the financial policies are designed to identify, assess, address and non-financial performance of the Company and monitor strategic, operational (including via a half year report, annual Shareholder Review, risks to health, safety and the environment), a full Annual Report, Sustainability Report and legal, reputational, commodity, environmental, annual general meeting material. These reports social and financial risks to achieve business are also available on the ASX and in online objectives. Certain specific risks are covered digital format via Origin’s website. by insurance and the Board has also approved Sustainability reporting is guided by the policies for hedging interest rates, foreign Global Reporting Initiative and includes exchange rates and commodities. disclosures of material environmental, Management is responsible for the design social and governance (ESG) aspects of the and implementation of the risk management Our Diversity and Company’s business activities. and internal control systems to manage Origin’s The Company also discloses other ESG business risks. Management has reported to Inclusion Policy information via regulated National Greenhouse the Risk Committee and the Board that, as at guides behaviours Emissions Reporting, as well as voluntary 30 June 2015, its material business risks are and actions, and disclosure platforms such as the Carbon being managed effectively. Disclosure Project and the Dow Jones Beyond the financial results, the Company aims to create an Sustainability Index. ESG disclosures are also is witnessing changes in community attitudes environment in made to meet FTSE4Good requirements. and increased focus on local and global All communications from, and the majority environmental challenges. The Company which all individuals of communications to, the Company’s share recognises the need for disclosure to help are supported and registry are available electronically, including investors assess both short term and long term the publication of company reports, and risks and prospects. The Sustainability Report respected. shareholders are encouraged to take is re-examined each year to assess the quality up the option of e-communications. and extent of that disclosure. The Company’s website contains a list Origin assesses the environmental and social of key dates and all recent announcements, risks associated with all projects and operations. presentations, past and current company Projects are developed with precautionary reports and notices of meetings. Shareholder engineering and management measures in place meetings and results announcements are to mitigate or manage key environmental and webcast and an archive of these meetings social risks, and operations are managed using is published on the Company’s website. policies and procedures to control remaining The Company welcomes and encourages environmental and social risks. Environmental shareholders to attend and participate at its and social risk management is subject to AGM, either in person, by proxy or attorney periodic audits and assurance. or by other means adopted by the Board. As one of Australia’s largest power generators, At each AGM, the Chairman will allow Origin closely measures, manages and reports a reasonable opportunity for shareholders on the emissions associated with its generation to ask questions of the Board. Shareholders operations. A large proportion of these are who are unable to attend the AGM will be able governed by laws and regulations. In addition, to view a webcast of the meeting (and certain the Company voluntarily reports its emissions, past AGMs) on the Company’s website. and management of this extends to the active The Company has a dedicated investor development of a low carbon power generation relations function to facilitate effective portfolio including natural gas and wind. two-way communication with investors. Further detail on Recognising and Managing This is in conjunction with a wider stakeholder risk can be found in the Annual Report and engagement program. on Origin’s website. The Communications with Shareholders Policy is available on the Company’s website. Remunerate fairly and responsibly The remuneration of Non-executive Directors is structured separately from that of the Executive Directors and senior executives. The Remuneration Report sets out details of the Company’s policies and practices for remunerating Directors, key management personnel and employees. Further information about the Remuneration Committee’s activities is provided in the Remuneration Report.

54 MANAGING OUR BUSINESS Voluntary targets DIVERSITY AND INCLUSION Accordingly the Company committed Origin is committed to providing equality in FY2015 to: of opportunity and a rewarding workplace 1. continue to deliver equal average pay for all employees. Increasing gender diversity, for men and women at each job grade; especially in senior roles, is an ongoing policy 2. increase the number of women in senior priority. Our Diversity and Inclusion Policy roles, with a target to improve the rate guides behaviours and actions, and aims to of appointment of women to senior roles create an environment in which all individuals by 15 per cent; and are supported and respected. 3. improve our retention of women in senior Our Policy applies to all aspects of employment roles, with a target to improve our turnover including recruitment, selection, promotion, rate among women in senior roles by training, remuneration, benefits, performance 15 per cent. management, and all other terms and conditions Progress against these targets is reported of employment. A particular priority is improving internally on a quarterly basis to the Diversity gender balance, especially in senior roles. Council comprising the Executive Management Origin continues to be recognised as Workplace Team and chaired by the Managing Director. Gender Equality Agency’s Employer of Choice for Gender Equality. Origin is also the only Performance against targets Australian company to rank in the top 20 (1) Deliver equal average pay for in a global Ernst & Young report on gender men and women at each job grade diversity in the Power and Utilities industry. We were the best performer in the Asia Pacific Average pay for men and women at each job region, and ranked fifth globally. grade fluctuates through the year with turnover, recruitment and promotions, but once a year We have also been recognised by Females the Company undertakes a comprehensive in IT and Telecommunications (FITT) in its review of all aspects of remuneration. In FY2015 2015 Diversity Report as the most supportive the average female pay was higher at some place for women to work in IT in Australia. grades than average male pay and lower at Of 30 companies named in FITT’s report, others. The average difference between male Origin was chosen as number one for women. and female pay across all job grades was within To date, women make up 41 per cent of Origin’s our targeted range of less than one per cent. IT team compared with the IT sector average Job grades are defined using standard Hay of 28 per cent. Pay Scales. As part of our commitment to increase gender diversity at Origin, we have committed to three (1) Ernst & Young, Talent at the table: Women in Power and Utilities Index, 2015. voluntary targets.

BELOW Origin is committed to workplace diversity and equal opportunity for its people.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 55 Improve our rate of appointment APPOINTMENT TO SENIOR FEMALES IN SELECTED COHORTS ROLES, FEMALE (%) of women to senior roles by 15 per cent AS AT 30 JUNE 2015(4) versus the prior year The percentage of women recruited into senior

37.3 roles (35.9 per cent) was comfortably the highest 35.9 ever, as shown in the chart on the left. Key 32.5 policies and actions to drive this result included: Females on the Board every interview panel for a senior role must %

25.8 33 25.7 be made up of both men and women; where 9 people in cohort 24.5 24.2 (1) 23.4

22.8 possible every shortlist must have at least one woman; and progress versus target for CEO-1 Executive Management Team each Business Unit is reported to and reviewed 11% by the Diversity Council each quarter. 9 people in cohort

CEO-2 Improve our turnover rate among senior Other executives, general managers women by 15 per cent versus the prior year 29% and managers The rate of senior female turnover actually 51 people in cohort increased this year. Like FY2013, which included a significant downsizing program in Energy CEO-3 Managers FY08 FY09 FY10 FY11 FY12 FY13 FY15 FY15 FY14 Markets, both male and female turnover

ARGET 34% T increased in FY2015. 158 people in cohort As at 30 June 2015, 40 per cent of Origin’s (2) Females in senior roles employees were female . Eleven per cent of the See discussion on this page Executive Management Team and 28.1 per cent 28.1% SENIOR FEMALE TURNOVER (%) of senior roles were filled by women. 1,861 people in cohort

Definition of seniority 18.2

17.1 For the purpose of setting targets, we define Targets for FY2016 16.5 seniority by reference to standard Hay Pay Origin’s targets for equal pay and for senior 15.1 14.8 14.0 13.9 Scale job grades rather than by reference appointments will remain the same as last year. 13.4 to reporting relationship to the CEO. However, Origin’s turnover target will change. 11.4 We do this for two reasons: In recent years Origin has targeted a 15 per cent —— to make genuine comparisons of seniority. year on year reduction in turnover of senior Executives leading four support functions women. However our turnover rate for senior currently report to the CEO. A large women, as for men, has been mainly driven number of people in areas such as legal, by economic factors unrelated to differential company secretary, human resources treatment by gender. and communications are therefore For FY2016, the Company will instead measure only two or three steps below the CEO, the difference in male turnover and female whereas many roles with significant line turnover rates among our senior employees, management responsibility, large teams with a target to reduce the gap between female FY08 FY09 FY10 FY11 FY12 FY13 FY15 FY15 FY14 or bottom line accountability are not; and and male turnover to zero. While male and ARGET T —— to make analysis comparable over time. female turnover is strongly correlated, female Any restructure that changes Executive turnover in senior roles has on average been Management Team roles also changes higher than male turnover for most of the last the reporting relationship of hundreds ten years. In FY2015 the turnover rate for of people at lower levels, making it women in senior roles was 1.8 percentage impossible to accurately compare progress points higher than the male rate. on gender pay equality at those levels In summary Origin’s targets for FY2016 are: before and after the restructure. —— continue to deliver equal average pay The cohort we define as ‘senior roles’ includes for men and women at each job grade; all people in Hay Pay Scale job grades that pay approximately $150,000 per year or more —— improve the proportion of senior roles in total remuneration(3). As at 30 June 2015 occupied by women, with targets to: there were 1,861 people in senior roles, —— improve our rate of appointment of of which 28.1 per cent were women. women to senior roles by 15 per cent compared to FY2015; and Gender breakdown by reporting —— reduce the gap between female relationship to the CEO and male turnover rates to zero. While the Company does not use reporting The Board is responsible for overseeing the relationship to the CEO to define Origin’s Company’s strategies on gender diversity, gender diversity targets, the gender profile including monitoring of the Company’s (1) Some senior roles, mainly engineering and technical, receive no female of these cohorts is of interest to some achievements against any gender targets applicants. external stakeholders and is presented set by the Board. The Board has set itself (2) This excludes Eraring Power Station in the following diagram. a target of having at least 40 per cent and New Zealand employees. females by 2020. (3) The number can only be approximate because exact remuneration varies by individual by year according to their assessed performance under the Short Term Incentive Scheme. (4) Definitions of CEO-1, CEO-2 and CEO-3 are as per Workplace Gender Equality Agency guidelines. That is, they do not include clerical and administrative staff or other staff that do not themselves manage other people. With all staff included, CEO-3 at Origin was 49 per cent female out of a total cohort of 269 as at June 30 2015.

56 MANAGING OUR BUSINESS opportunity – and the obligation – to play RECONCILIATION ACTION PLAN a more active role in Australia’s reconciliation efforts. The plan provides a list of our aspirations There is still on average a large gap between for 2015 and 2016 under four areas: culture the lives and prospects of Aboriginal and Torres of respect; education, skills, jobs and careers; Strait Islander Australians and those of other commerce and community development; and Australians. Many organisations across Australia relationships and partnerships that will add value are taking action to close this gap and Origin’s to our efforts, and the efforts of others. first Reconciliation Action Plan (RAP) is our As part of the 2015 National Reconciliation contribution to this collective effort. Week, Origin Managing Director Grant King Launched in April 2015, Origin’s RAP officially and Origin CEO Integrated Gas David Baldwin outlines our commitment to respect the rights met with Reconciliation Australia’s CEO Justin and interests of the Aboriginal and Torres Strait Mohamed. It was an opportunity for us to share Islander communities in which we operate, and with Reconciliation Australia our plans and is underpinned by our principles of diversity and aspirations, as we look to deliver on our inclusion. The plan also serves to highlight the commitments contained within the RAP. Company’s recognition that we have the

Origin’s RAP officially outlines our commitment to respect the rights and interests of the Aboriginal and Torres Strait Islander communities in which we operate.

A PERSONAL REFLECTION FROM AN ORIGIN EMPLOYEE

Melanie Grills is the Manager, ”I am a Gomeroi Woman from Moree Aboriginal and Torres Strait Islander in New South Wales. I’ve worked for Origin Strategy and Engagement for for almost three years and as I reflect on Integrated Gas, and a member our reconciliation journey so far, I am excited about the ways in which Origin can and of Origin’s Reconciliation Advisory will make a contribution to reconciliation Committee. Melanie and 10 other in Australia. Committee members are helping “Every day that I come to work, I am guide implementation of Origin’s motivated by hope. Hope that more first Reconciliation Action Plan. and more people will open themselves to acknowledging our shared history and seeing the beauty of the world’s oldest living culture through a lens free from bias. “Hope for my daughter that outside our

ABOVE family home, she can see, feel and hear Origin’s Melanie Grills and her daughter Charli. others celebrate her culture in a society where inclusivity is the norm. Hope that our organisation realises its potential to become leaders of authenticity in this space.”

DISCOVER MORE ONLINE

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 MANAGING OUR BUSINESS 57 Improved systems and processes EMPLOYEE ENGAGEMENT A priority has been investment in people- Origin is committed to creating a rewarding related systems and processes. Our new portal workplace for its people by valuing their will make it easier for our employees to access contribution, encouraging personal development, People & Culture services and up-to-date recognising good performance and fostering people-related information. We are also diversity and equality of opportunity. An engaged, introducing a new advisory service which high performing workforce is intrinsically tied provides our people managers with immediate to a company’s performance, innovation, access to Business Partner advice via phone productivity and overall success. and email. These new services will be available across the Company early in the 2016 Steps to strengthen engagement financial year. At Origin, we have been taking steps to create Manager and leader capability a more rewarding workplace for our employees. An important first step was developing a better We are committed to building the capability understanding of what our employees think of people managers across the business through and feel about Origin, to help us create targeted our Management and Leadership program. action plans. We undertake employee surveys During the year, we defined the 13 behaviours to capture feedback and provide employees expected of all people managers at Origin. with a voice to help shape their workplace. We’ve also introduced three key learning initiatives as follows: Past engagement surveys demonstrate employee recognition of the emphasis —— Monthly Management-In-Focus Sessions; Origin places on safety, diversity and work-life —— training across the areas of self-awareness, balance; as well as the company’s drive to set communications skills and managing clear direction through KPIs. Our results performance; and in these areas are well above average for —— peer-based learning groups. an Australian company. Our learning initiatives are currently In early 2015, We use AON Hewitt’s methodology to measure being undertaken by all people managers engagement, which helps us understand across Origin. we launched the how much our people want to improve Communicating our story ECHO app which business performance, and how much they are actually contributing. The Origin brand is one of our most valuable enables employees assets, and we believe our employees can be During the 2015 financial year, our employee great advocates of Origin. As such, it is imperative to use their smart engagement score was introduced as a Key we invest in communicating our story – who Performance Indicator (KPI) and linked phone to fast we are, what we do, what we stand for – so our to executive remuneration. employees can be proud of where they work. track customer Eighty-six per cent of Origin employees Increasingly, more and more people are using participated in the survey and our 2015 support and sales online channels to access information and engagement score improved from 47 per cent interact with Origin. Reflecting this trend, enquiries for family to 52 per cent, an increase of 11 per cent. we launched a new responsive website which While we have more work to do to reach the and friends. enables a consistent look across all devices Australian average of 57 per cent(1), the results – phone, tablet, laptop etc. Customers have demonstrates that more employees were been at the heart of the new design and connected to Origin’s vision and direction, as part of the new website, we have also were more positive about the brand and refreshed our My Account so customers their day-to-day roles. can truly do business with us at any time of the day, or day of the week. Working@Origin Our 2014 Origin-wide engagement survey We have also launched the Origin ‘Blog’. told us some important things, and helped This provides us with a new way to to crystallise the following three focus areas engage and connect with our customers, for the business as we strive to create a more the community, government and media effective and rewarding workplace: on matters related to energy. 1. improved systems and processes; Our Energy Made Fresh Daily campaign was 2. manager and leader capability; and relaunched in May. The campaign continues 3. communicating our story. our story and encourages Australians to make energy fresh daily through solar power. This year, we created a new program, Working@ Origin which is how we refer to these initiatives. Earlier in 2015, we also launched the Everyone During the period, we undertook a number Can Help Out (ECHO) app, which enables employees to use their smart phone to fast of actions as part of Working@Origin. track support for customer enquiries and sales. Our Next Generation communication program delivered new and improved ways to communicate with our employees and continued our focus on building employee engagement.

(1) AON Hewitt’s methodology.

58 MANAGING OUR BUSINESS WE HELP BRUCE AND KATE WHIP UP A MEAL We provide natural gas to aspiring chefs across Australia so they can show off their skills in the kitchen.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 59 FUTURE The world is facing the challenge of increasing ENERGY energy supply to meet growing demand, while SOLUTIONS at the same time limiting emissions from energy production to help combat climate change. As an energy company planning long-term investments in energy solutions, Origin thinks deeply about these challenges and the role we can we play in solving them. In this section, we discuss how the pursuit of Origin’s business strategy will drive the Company’s roll out of lower carbon and renewable energy solutions.

In addition to large scale renewable energy DEVELOPING CLEANER assets, distributed forms of power generation ENERGY SOLUTIONS such as solar PV have grown substantially Origin’s business is over the past five years, giving people the Origin’s business is well-positioned for opportunity to generate their own renewable well-positioned for a carbon-constrained future, as it is made energy. Australia has the highest penetration a carbon-constrained up primarily of investments in natural gas of solar anywhere in the world(1) and Origin and renewable energy. These fuels will remain is one of the largest solar providers. Today, future, as it is the primary focus of Origin’s investment in we have more than 391,000 solar customers, made up primarily future energy solutions, whether in Australia having directly installed more than 80,000 or internationally, as pursued through our solar systems. of investments three businesses: In 2014, we announced a renewed commitment in natural gas and —— a regional leader in energy markets; to our solar business, bringing new products renewable energy. —— a regionally significant position in natural and services to market such as Solar as a Service, gas and LNG production; and, a Power Purchase Agreement (PPA) product —— a growing position in renewable energy. which provides customers with the benefits of solar without having to purchase the system. Energy Markets This is helping to open up solar to new markets, Our Energy Markets business generates power including small, medium and large businesses. on a utility scale, provides distributed energy Approximately 40 per cent of solar sales are solutions such as solar PV to both residential now coming from Solar as a Service. Origin and commercial customers and also pursues an continues to see a strong opportunity to innovation program aiming to provide new grow our solar business, with reports that energy technologies and solutions to help solar penetration in Australia could grow from customers use energy more efficiently. around 4 GW today to 18-20 GW by 2030 At a utility scale, Origin is currently considering aided by new technologies(2). potential future investments in renewable Energy Markets also seeks to develop new energy generation. The Australian power solutions for consumers and businesses that generation market is currently over-supplied help make their energy consumption more and so new generation is not required in visible, efficient, affordable and deliver lower order to meet growth in demand. However, carbon outcomes. These solutions include the Australian Government’s legislated RET smart metering, battery storage and electric requires that 33 TWh of electricity will come vehicles, among other things. from renewable sources by 2020. Substantial This year, Origin has been trialling a battery investment is required in large-scale renewable product in market. We expect the battery energy projects over the next five years market to initially be small, but to grow in order to achieve the target. larger beyond 2020 when the economics We are currently considering the potential improve as technology costs come down. development of Stockyard Hill Wind Farm It is Origin’s expectation that batteries in Victoria, which has already received planning will work as a complement to the existing approval, and the potential for utility scale solar grid, as opposed to working in direct plants in Queensland, to help meet the target. competition with it.

(1) Energy Supply Association of Australia, Household Solar: Australia First, Daylight Second, 2015. (2) Bloomberg New Energy Finance.

60 FUTURE ENERGY SOLUTIONS Natural Gas and LNG A Worley Parsons report found that for each Origin is a leader in the development tonne of carbon emissions from LNG production of natural gas resources in Australia. Through in Australia, carbon emissions in China are our natural gas and LNG business, we explore reduced by 4.3 tonnes when this gas is used (4) for commercial quantities of gas that can in electricity generation in place of coal . be economically developed and connected This demonstrates one of the global benefits to markets, including opportunities to liquefy available from the development of Australia’s the gas for safe transportation to regional abundant natural gas resources. markets such as Asia. Origin also has natural gas exploration and As a cleaner burning fuel that is safely production interests principally located in transportable, natural gas will continue eastern and southern Australia, the Browse to play a critical role in meeting the world’s and Perth basins in Western Australia, the growing demand for energy. Natural gas Bonaparte Basin in north western Australia can produce up to 70 per cent(1) less carbon and Beetaloo basins in the Northern Territory emissions than coal when used for power and in New Zealand. generation, and as the world’s fastest growing The appraisal and development focus is on fossil fuel it is expected to play an increasing executing projects with the highest returns role in displacing coal. and shorter payback periods. The success of The IEA expects global gas demand to increase the Halladale and Speculant drilling program by an annual average of 2.0 per cent between will enable increased utilisation of the onshore now and 2020(2). The outlook for gas demand Otway facilities, with first gas expected early in China, non-OECD Asia and Africa to 2020 in the 2017 financial year. The Ironbark field is higher, with compound average growth rates has also been prioritised for development. of 10, 2.9 and 3.0 per cent respectively(2). The Secencio and Waitsia drilling programs Origin’s Integrated Gas business comprises the in the Perth Basin identified significant Australia Pacific LNG project, which is nearing conventional and tight gas potential. Origin completion, as well as a number of exploration will continue to work with its joint venture and production interests in Australia and partner, AWE Limited to appraise the discovery. New Zealand. Origin continues to participate in other Australia Pacific LNG, in which Origin has exploration permit and joint venture a 37.5 per cent shareholding, is contracted commitments, including the acquisition to export approximately 8.6 million tonnes of seismic survey data in the Canterbury per annum of LNG to customers in China Basin in New Zealand. (1) www.appea.com.au/oil-gas-explained/ and Japan under long-term contracts for benefits/cleaner-energy/. (2) International Energy Agency, approximately 20 years. Medium-Term Gas Market Report 2015. In Australia, the LNG market is expected (3) RBA Bulletin, Australia and the Global to triple between now and 2017 with the LNG Market: March Quarter 2015. (4) Worley Parsons, Greenhouse Gas completion of a number of projects and ramp Emissions Study of Australian CSG up of exports from the east coast, making to LNG, 2011. Australia the world’s largest producer (3) of LNG by 2018 . BELOW Australia Pacific LNG’s project remains on track.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 FUTURE ENERGY SOLUTIONS 61 During the 2015 financial year, Origin increased RENEWABLE ENERGY its investment in Energía Andina by 9.9 per cent OPPORTUNITIES to 49.9 per cent. In the same period, Energía Origin has an Andina acquired a 40 per cent stake in the 69 MW One of Origin’s priorities is to grow our Javiera solar project in Chile’s Atacama Desert, interest in the capabilities and investment in renewable which is considered to be one of the world’s 69 MW Javiera energy. In 2014, renewable energy accounted best solar resources. It commenced commercial for nearly half of all new power generation operations in the second half of the 2015 (1) solar project globally . We expect energy sources like financial year. US-based solar leader SunEdison in Chile’s Atacama hydro, geothermal and solar to play an is also a partner in Javiera, which has a long-term increasingly important role in the global PPA to sell energy to the Los Pelambres copper Desert – one of energy mix in the future and Origin will mine. Origin also acquired 100 per cent of the world’s best play a part in that growth. the Alfa solar development project, which is In addition to the Australian solar and wind approved for 280 MW with a possible expansion solar resources. opportunities pursued through the Energy to 530 MW, also located in the Atacama Desert. Markets business, Origin also has interests Origin has a 33 per cent interest in Energía in a range of hydro, geothermal and large- Austral, which is currently progressing the scale solar projects in Chile and Indonesia. potential development of a 640 MW hydro project known as Cuervo. Chile Over the past decade, Chile has become one Indonesia of the fastest growing economies in South With a population of around 257 million(3) America, and in 2010 was the first South Indonesia is the world’s fourth most populous American country to join the OECD. It is also nation behind China, India and the US. the world’s dominant producer of copper, and Estimated to have about 40 per cent of with increasing demand for copper, electricity the world’s potential geothermal reserves(4), consumption is expected to nearly double from Indonesia’s potential for renewable energy around 66 TWh to almost 130 TWh by 2030(2). is high. In the lead up to the United Nations Chile has abundant renewable energy resources Framework Convention on Climate Change and limited fossil fuels, driving strong growth meeting in Paris, the government has in renewable energy. The government has also announced a further renewable energy target set a renewable energy target of 20 per cent of 19 per cent by 2019. The existing target by 2025. envisages 25 per cent of renewable energy (1) International Energy Agency, Energy and Climate Change: World Origin has been pursuing opportunities in by 2025. Energy Outlook Special Report, 2015. geothermal and solar with its interest in Energía Through our interest in Geothermal Services (2) National Electricity Commission, April 2015, Node Price Report. Andina, its joint venture with Antofagasta Indonesia (OTP), Origin is pursuing geothermal (3) United Nations, World Population Minerals in Chile, the Alfa solar development opportunities. OTP continues to progress Prospects, 2015 Revision. project and in hydro with Energía Austral its geothermal developments and recently (4) www.worldbank.org/en/news/feature/ Cuervo hydroelectric plant. signed a PPA for the Sorik Marapi project 2011/07/26/indonesia-expand- geothermal-power-alternative-coal. in North Sumatra. Securing this agreement will help underpin the next stage of

BELOW development of the resource. The 69 MW Javiera solar project in Chile.

62 FUTURE ENERGY SOLUTIONS WE HELP YOUNG PEOPLE BE THEIR BEST We’re committed to giving young Australians a brighter future through education, training and development.

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 63 PHILANTHROPY The Origin Foundation is our philanthropic body, funded and established by Origin in 2010. Our focus, chosen by the people of Origin, is to support programs that use education to help break the cycle of disadvantage and empower young Australians to reach their potential.

The Foundation provides funding to Australian For the past three years we have been funding non-profit organisations that use education, the development of The Smith Family’s Let’s Count training and development to help young people early math program for pre-school children. Since its inception, become the best that they can be. Since Evaluation of the program has shown that Let’s inception, the Origin Foundation has committed Count has positively impacted on the children, the Origin to giving $17.8 million and helped more than parents and educators who participated, Foundation has 22,000 Australian children with their education. demonstrating that children who undertake the committed to giving While the focus of the Foundation has spanned program are achieving to a significantly greater the education lifecycle, from early childhood level than their peers who were not involved $17.8 million and intervention to life-long learning, we have now in the program. We profile this program in the sharpened our focus on the following areas: story Boosting Maths Skills and Confidence helped more than on page 65. —— creating greater gender diversity in 22,000 Australian ‘STEM’ education – science, technology, Origin’s employees play a critical role in the children with their engineering and maths; Origin Foundation through the Give Time program. With fully paid volunteer leave, Origin education. —— providing equality of educational employees donate their time and professional opportunity for Indigenous students, and skills to help our Foundation partners. In the children in rural and remote Australia; 2015 financial year, 940 employees gave —— building a stronger community sector 5,809 hours to a wide variety of projects, by increasing the professionalism and including helping young Indigenous children productivity of the not-for-profit sector with their reading, hosting high school through training and development; and industry career visits, assisting with bushfire —— facilitating engagement in the community recovery efforts, renovating a rooftop by Origin employees. playground, and providing mentoring for disadvantaged teenagers. Through our Grants Program, we have funded more than 187 scholarships for current and The Foundation also matches the donations future leaders in the not-for-profit sector over Origin employees make to charitable the past four years. We are funding research by organisations through the workplace giving the Centre for Social Impact, which we hope will program. In the 2015 financial year, Origin demonstrate the positive impact of continuing employees donated more than $370,000 education and training and shift attitudes within through the Give2 program. When matched the sector and among funders. by the Origin Foundation, over $740,000 went to the not-for-profit sector, to support We have long believed that educational over 238 organisations representing causes opportunity should be available to all such as cancer research, men’s health, and children. More than 33 per cent of our grant sustainable solutions to poverty. commitments have gone towards Indigenous education programs in Australia and parts The performance of the Origin Foundation of the Asia Pacific region. Forty-five per cent is published annually and can be read at of our funding has been directed at programs www.originfoundation.com.au. We look operating in rural and regional Australia. forward to the continued growth of the Origin Foundation’s activities and impact in coming years.

64 PHILANTHROPY BOOSTING MATHS SKILLS AND CONFIDENCE

The Origin Foundation has The Smith Family’s Head of Research and Let’s Count for Origin employees supported The Smith Family’s Advocacy Anne Hampshire said numeracy The Origin Foundation has also Let’s Count program, an innovative is a critical skill for everyday activities and worked with The Smith Family to create early numeracy program, which early mathematical literacy assists children a condensed version of the Let’s Count in building a bright future. helps three to five year olds boost program for Origin employees who are their mathematical skills. “The results clearly show how we can improve parents of young children. More than disadvantaged children’s mathematical skills and 300 Origin employees have participated It would be hard to find a better cause confidence and help set them up for success in LetsCount@Work one-hour workshops, than assisting children in disadvantaged at school,” Anne said. to learn fun and practical ways to support communities improve their mathematical “We know that childhood maths skills predict their child’s early numeracy development. skills and confidence. later maths achievement – children who start The Smith Family is now offering these The Smith Family’s Let’s Count program ahead generally stay ahead. So if we can get workshops to other organisations, which is an innovative early numeracy program, disadvantaged children off to a great start with pay for the sessions for their employees. helping three to five year olds do just that. their mathematics, we’re setting them up for An innovative social enterprise model, future success. Let’s Count gives young children early the revenue raised is channelled back into exposure to mathematics, including “Having proven the effectiveness of Let’s Count, the delivery of the Let’s Count program counting, measurement, patterns and there is now great scope to expand the program to help children in disadvantaged spatial awareness as well as support to support many more children across Australia. communities across Australia. and learning resources for families We encourage governments, educators, and care givers. philanthropy and corporates to embrace the potential of this program for the benefit of all young children and the long-term future of Australia.” Through the financial support of $1.6 million from the Origin Foundation, the program has reached 8,500 children, 4,500 parents and more than 300 educators across 17 Australian communities.

ABOVE Crunching the numbers at Gowrie St Preschool and Occasional Care. Ned Pattison and Steele Bajada enjoy the Let’s Count program.

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ORIGIN ENERGY SUSTAINABILITY REPORT 2015 PHILANTHROPY 65 ENGINEERS WILL BE CRUCIAL TO MEETING THE CHALLENGES THAT LIE AHEAD

The Origin Foundation and Over two hundred school students in the Engineers Without Borders Toowoomba region were asked to imagine “The day helps Australia are working together a career which could take them to remote to promote careers in engineering locations around the world, building and inspire the next delivering critical infrastructure for the and science, to make sure Australia communities where it is needed most. generation of has the skills available in the future Given the nature of Origin’s business, engineers and to meet the challenges that we employ a large number of engineers and lie ahead. scientists. Some of these people were asked demonstrates According to Professor Ian Chubb, Australia’s to volunteer and share their careers with how science, Chief Scientist, the nation needs to invest the students and facilitate hands-on learning, technology, in all levels of STEM education – science, such as building a functioning water filter technology, engineering and maths – to meet out of common household materials, and engineering and the challenges that lie ahead this century. constructing housing which can adapt to changing water levels. maths can be This is one reason the Origin Foundation partnered with Engineers Without Borders Over 25 of our engineering and science experts applied to make Australia – a not-for-profit organisation travelled to Toowoomba to share first-hand a positive impact working to improve access to clean water, STEM expertise including mechanical, pipeline, sanitation and hygiene, energy and waste drilling and civil engineering, information on people’s lives.” systems in countries that need it most. technology, and environmental science. Michelle Cheah Promoting careers in engineering Michelle Cheah, from Engineers Without Engineers Without Borders and science to senior school students Borders Australia said, “The day helps inspire the in southern Queensland. next generation of engineers and demonstrates how science, technology, engineering and maths can be applied to make a positive impact on people’s lives. It’s a side of the profession that students don’t often associate with engineering.” The Origin Foundation provided funding and ABOVE access to engineering experts who currently Origin employees, Naz Riffah (Completions and Workovers Engineer) work with Origin. and Tom Hansford (Mechanical Integrity Engineer) inspiring school students in the Toowoomba region.

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66 PHILANTHROPY During the year, Origin participated in a number RATINGS AND of surveys commissioned by different sustainability BENCHMARKS ratings agencies. These help our stakeholders review our performance using common benchmarks.

RATINGS AND BENCHMARKS

Dow Jones Sustainability Index CDP FTSE4Good We were included in the Dow Jones Origin participates in CDP’s annual request Since 2004, Origin has been a member of the Sustainability Index. This tracks the for disclosure of climate change impact. CDP FTSE4Good Index Series, which is designed performance of the top 30 per cent is an international not-for-profit organisation to measure the performance of companies of companies in the S&P/ASX 200 that providing the only global system for companies demonstrating strong Environmental, Social lead the field in terms of sustainability. and cities to measure, disclose, manage and and Governance practices. The Index is based on an analysis of share vital environmental information. corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labour practices.

London Benchmarking Group Energy Supply Association of Australia LBG is the global standard for measuring Since 2009, Origin has been a signatory and benchmarking corporate community to the Energy Supply Association of Australia’s investment. Our community investment (esaa) Sustainable Practice Framework, which data is independently verified by LBG, is a major platform for the energy supply which promotes a consistent set of criteria sector’s work in improving sustainability for determining community investment, in the industry. donations and commercial initiatives in the community.

Feedback contact [email protected] Origin Sustainability Level 45, Australia Square 264-278 George Street Sydney NSW 2000 Australia

ORIGIN ENERGY SUSTAINABILITY REPORT 2015 RATINGS AND BENCHMARKS 67 Cultural Management Heritage Plans Power On Origin Energy’s hardship program GLOSSARY Policies and protocols to manage and protect which provides payment options for customers cultural heritage. experiencing financial difficulty. NON-IFRS FINANCIAL MEASURES Downstream Operations and activities that Produced Water Water in oil and gas reservoirs take place after gas has been delivered via pipeline brought to the surface during hydrocarbon This document includes certain Non-IFRS to the LNG Facility, including dehydration and production. Typically, the water is highly saline Financial Measures. Non-IFRS Financial Measures compression of gas into liquid form, storage in and contains traces of inorganic and organic are defined as financial measures that are presented LNG tanks & transfer to LNG shipping tankers. contaminants, as well as residual chemical additives. other than in accordance with all relevant Accounting Standards. Non-IFRS Financial ERF Australian Government’s Emissions RET The Federal Government mandated Measures are used internally by management Reduction Fund. Renewable Energy Target. to assess the performance of Origin’s business, Electricity measures: Seismic survey A geophysical survey and to make decisions on allocation of resources. to understand rock formations beneath Watt (W) A measure of power when The Non-IFRS Financial Measures have been the Earth’s surface. a one ampere of current flows under derived from Statutory Financial Measures one volt of pressure. SIMP Origin’s Social Impact Management Plan included in the Origin Consolidated Financial Total Recordable Injury Frequency Rate is Statements, and are provided in this report, Kilowatt (kW) One kW equals 1,000 watts. TRIFR the total number of fatalities and injuries resulting along with the Statutory Financial Measures to Standard unit of Kilowatt Hour (kWh) in lost time, restricted work duties or medical enable further insight and a different perspective electrical energy representing consumption treatment per million hours worked. into the financial performance, including profit of one kilowatt over one hour. Train A series of specialised equipment and and loss and cash flow outcomes, of the Origin One MW equals 1,000 kW Megawatt (MW) machinery to purify, dewater and compress business. The key Non-IFRS Financial Measures or one million watts. included in this report are defined below. natural gas, either to high pressure for transport Gigawatt hour (GWh) One GWh equals in a pipeline, or to liquid for shipping. Group OCAT Group Operating Cash Flow After 1,000 megawatt hours or one million Upstream Origin activities involving the Tax (OCAT) of the Consolidated Entity (including kilowatt hours. Origin’s share of Australia Pacific LNG OCAT). exploration and production of hydrocarbons. Terawatt hour (TWh) One TWh equals Water measures: Underlying profit and loss measures 1,000 gigawatt hours, or one million —— Profit megawatt hours. KL One kilolitre equals one thousand litres —— EBITDA (1,000 L). Gas measures: Underlying measures are measures used internally ML One megalitre equals one million litres by management to assess the profitability of the Joule Primary measure of energy (1,000,000 L). Origin business. The Underlying profit and loss in the metric system. measures are derived from the equivalent Gigajoule (GJ) A Gigajoule equals Statutory Profit measures disclosed in the Origin one billion joules. INFORMATION ON RESERVES AND RESOURCES Consolidated Financial Statements and exclude Terajoule (TJ) A Terajoule equals the impact of certain items that do not align with 1,000 gigajoules. This Sustainability Report includes disclosures the manner in which the Managing Director reviews of Origin and Australia Pacific LNG’s reserves the financial and operating performance of the Petajoule (PJ) A Petajoule equals and resources as at 30 June 2015. These reserves business. Underlying Profit is disclosed in note A1 one million gigajoules. and resources were announced on 31 July 2015 of the Origin Consolidated Financial Statements. Petajoules equivalent (PJe) An energy in Origin’s Annual Reserves Report for the year measurement Origin Energy uses to represent ended 30 June 2015 (Annual Reserves Report). the equivalent energy in different products NON-FINANCIAL TERMS Origin confirms that it is not aware of any new so the amount of energy contained in these information or data that materially affects the 1P reserves Proved Reserves are those reserves products can be compared. The factors used information included in the Annual Reserves which analysis of geological and engineering by Origin Energy to convert to PJe are: Report and that all the material assumptions and data can be estimated with reasonable certainty one million barrels crude oil equals 5.8 PJe; technical parameters underpinning the estimates to be commercially recoverable. There should one million barrels condensate equals 5.4 PJe; in the Annual Reserves Report continue to apply be at least a 90 per cent probability that the one million tonnes LPG equals 49.3 PJe; and have not materially changed. Petroleum quantities actually recovered will equal one TWh of electricity equals 3.6 PJe. reserves and contingent resources are typically or exceed the estimate. Geothermal Energy that is generated by prepared by deterministic methods with support 2P reserves The sum of Proved plus Probable converting hot water or steam from deep from probabilistic methods. Petroleum reserves Reserves. Probable Reserves are those reserves beneath the Earth’s surface into electricity. and contingent resources are aggregated which analysis of geological and engineering GHG Greenhouse Gas. by arithmetic summation by category and as data indicate are less likely to be recovered than a result, proved reserves (1P reserves) may be a Water beneath the surface of the Proved Reserves but more certain than Possible Groundwater conservative estimate due to the portfolio effects ground, that has come mainly from the seepage Reserves. There should be at least a 50 per cent of the arithmetic summation. Proved plus probable of surface water and is held in pervious rocks. probability that the quantities actually recovered plus possible (3P reserves) may be an optimistic will equal or exceed the best estimate of Proved Hydrocarbons Oil and gas, including condensate estimate due to the same aforementioned reasons. Plus Probable Reserves. and gas liquids (LPG and ethane). Some of Australia Pacific LNG CSG reserves and resources are subject to reversionary rights 3P reserves Proved plus Probable plus IEA International Energy Agency. to transfer back to Tri-Star a 45 per cent interest Possible Reserves. Possible Reserves are those Kbbls Kilobarrels equals 1,000 barrels. additional Reserves which analysts of geological in Australia Pacific LNG’s share of those CSG Kilotonnes equals 1,000 tonnes. and engineering data suggest are less likely Kt interests that were acquired from Tri-Star in to be recoverable than Probable Reserves. LNG Liquefied natural gas. 2002 if certain conditions are met. Approximately 22 per cent of Australia Pacific LNG’s 3P CSG The total quantities ultimately recovered from LPG Liquefied petroleum gas. the project have at least a 10 per cent probability reserves as of 30 June 2015 are subject to the LRA Origins Landholder Relations Adviser. of exceeding the sum of Proved plus Probable reversionary rights. If reversion occurs this may plus Possible, which is equivalent to the high LTIFR Lost time Injury Frequency Rate. mean that the uncommitted reserves that are subject to reversion are not available for estimate scenario. Material Aspects Activities against which we measure sustainability performance. Australia Pacific LNG to sell or use after the date Availability The time a generation plant was of reversion. Origin has assessed the potential available for use, after deducting planned and NEM The National Electricity Market. impact of reversionary rights associated with such unplanned outage hours, compared with the NGOs Non-government organisations. interests based on economic tests consistent with total time under review. Offshore exploration The search for these reserves and resources and based on that Biodiversity values A system’s biodiversity hydrocarbon deposits under the sea, assessment does not consider that reversion value can be determined from and defined such as natural gas or oil. will impact the reserves and resources quoted as its productivity, its ability to provide habitats in the Annual Reserves Report. In October for its dependent species and the diversity Onshore exploration The search for 2014, Tri-Star filed proceedings against Australia of species it supports. hydrocarbon deposits beneath the Earth’s Pacific LNG claiming that reversion has occurred. surface, such as natural gas or oil. CSIRO Commonwealth Scientific and Industrial Australia Pacific LNG will defend the claim. Research Organisation. Origin Foundation Origin’s philanthropic arm. CSG Coal Seam Gas is natural gas contained Photovoltaic Cells convert sunlight within coal seams. into electricity.

68 GLOSSARY

DIRECTORY ORIGIN ENERGY LIMITED

Registered office Level 45, Australia Square 264-278 George Street Sydney NSW 2000 GPO Box 5376 Sydney NSW 2001 T (02) 8345 5000 F (02) 9252 9244 www.originenergy.com.au [email protected]

Secretaries Andrew Clarke Helen Hardy

Share register Boardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000 GPO Box 3993 Sydney NSW 2001 T Australia 1300 664 446 T International (+61 2) 8016 2896 F (02) 9279 0664 www.boardroomlimited.com.au [email protected]

Further information about Origin’s performance can be found on the website: www.originenergy.com.au